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Wednesday 15th of October 2008
July 29, 2005

FTSE rises above 5300 points

by Brian Turner
FTSE rises above 5300 points

London: In London on Friday, the FTSE 100 rose above the 5,300 mark for awhile before sinking back to close at 5,282.3, a gain of 0.2 percent on the day and 0.8 for the week, while the FTSE 250 was up 0.4 percent for the day to close at 7,605.1, a gain of 1.5 percent on the week.

Volume was 2.8 billion shares, or about average. The fall from its high mark for the day was attributed to yet another security scare.

The Competition Commission also issued its report on the implications of a takeover of the London Stock Exchange by Deutsche Bourse and Euronext, saying that the merger could harm competition in clearing services, but the verdict is not considered to completely rule out a deal.

Shares in the LSE gained 4.9 percent to 540 ¼p on speculation that Euronext could still merge with the LSE if it divested itself of control of LHC Clearnet Group.

British American Tobacco gained on an upgrade to “buy” by UBS and from the news that India’s largest tobacco maker, ITC, 31 percent of which is owned by BAT, had seen a 21 percent rise in net profits in the first quarter. BAT was up 3.7 percent to £11.37.

In addition to its upgrade of BAT, UBS also increased its share price target from £10.25 to £12.50.

In the pharmaceuticals sector, AstraZeneca was up 3.1 percent to £25.58 after an increase in its full-year earnings guidance caused Cazenove to upgrade the drugmaker to “outperform” and Nomura to increase their rating to “buy”.

Europe: In European equities markets, the FTSE Eurofirst 300 closed at 1,179.31 on Friday, down just slightly on the day but up by 1.2 percent for the week.

Automobile manufacturer DaimlerChrysler was one of the big winners of the week, based on a positive quarterly report and the resignation of its unpopular chief executive. The company’s shares were up 12 percent on the week to €40.04.

Elsewhere in the automobile manufacturing sector, Fiat announced on Thursday that its profits had nearly doubled in the second quarter, gaining 2.9 percent on the week to close on Friday at €7.01. Volkswagen also had a better-than-anticipated quarterly result, sending its shares up 2.2 percent on the day and up 6.2 percent for the week, for a closing quote on Friday of €44.82. Daimler’s 9 percent rise on Thursday spurred Deutsche Bank to sell its 3.5 percent share of the company on the same day it released its own quarterly report and announced a huge share buyback. Deutsche Bank ended the week at €71.02, up 0.6 percent.

Less successful on the week were the chipmakers. STMicroelectronics released their second-quarter report on Wednesday, showing net profits down by 82 percent because of slow sales and restructuring costs and losing 3.3 percent for the week to €14.22. Infineon reported disappointing results as well this week, sending shares down 3.8 percent to €8.11 and earning downgrades from several ratings agencies.

Japan: In Tokyo on Friday the Nikkei 225 found itself at yet another four month high at the close on a combination of hopeful economic data, including the best jobs-to-applicants figures in over 10 years, good quarterly earnings reports, and strong results on the day from several companies.

Even so, the market’s overall rise was held back by other earnings results that were not as strong as others. The Nikkei was up 0.35 on the day to 11,899.60, while the Topix index gained 0.3 percent to 1,204.98. Matsushita Electrical Industrial was up 5 percent to ¥1,832 on a more positive quarterly earnings report than had been expected.

Sony, however, fell 3.6 percent on a weak quarterly report and a full-year forecast that was cut by over 80 percent. Sony blamed weak sales and price declines in its television division for the unfavorable report. Electronic parts manufacturer Kyocera lost 3.4 percent to ¥7,930 on a report of a 61 percent decline in quarterly profits. UBS subsequently downgraded Kyocera to “Neutral 2”.

Cosmetics manufacturer Shiseido, Japan’s largest, gained 8.3 percent to ¥1,532 on a quarterly report that showed the company returning to profits. The company gave credit for the improvement to good sales in Japan and China and upgraded its full-year profit forecast by 35 percent.

New York: The New York equities markets found themselves at the end of the week almost exactly where they had started on Monday, losing early gains despite a group of positive reports on the US economy.

The Dow Jones Industrial Average lost 0.6 percent on Friday to close the week at 10,640.91, the Nadsaq also lost 0.6 percent to end at 2,184.83, and the S&P 500 declined by 0.8 percent to 1,234.18.

Amazon led the gainers on the week, with an advance of 19 percent to close at $45.15. Wendy’s International did very well, too, with a gain of 14.2 percent to $51.70, as it said Friday it would sell as much as 18 percent of its Tim Horton chain of coffee and donut shops in an initial public offering.

On the down side, Delta Airlines lost nearly 15 percent during the week to $2.96 after a warning that the air carrier is fighting to keep its head above water. In the oil sector, Chevron reported a 10 percent decline in income as it tries to fight off CNOOC to purchase Unocal. The value of Chevron’s shares declined by 1.6 percent to $58.01.

Exxon Mobil was about even for the week but has gained nearly 15 percent since the beginning of the year, closing at $58.75. Royal Dutch Shell reported earnings above expectations and saw its shares rise by 1.5 percent to $61.28 on Friday.

In the aerospace sector, Boeing reported better than expected earnings in the second quarter, and even though profits fell 7 percent the airplane manufacturer upped its earnings outlook for the year. While Boeing’s shares were flat at its close at $66.01, share value is up by more than 27 percent since the beginning of the year.

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