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April 8, 2010    

Xstrata leads miners lower on falling metals prices

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by Elaine Frei
Xstrata leads miners lower on falling metals prices

Equities markets in Europe were down Thursday on new worries that Greece may yet default on its debt after the nation’s prime minister insisted that new austerity measures are unnecessary.

Both the Bank of England and the European Central Bank kept interest rates on hold, at 0.5 percent in the UK and at 1 percent in the Eurozone.

The FTSE 100 was 0.86 percent lower to 5,712.7 in London, while the FTSE 250 dropped 0.39 percent to 10,379.48..

Most miners were lower as metals prices fell, with three in the sector among the five biggest losers on the 100, led by Xstrata (LSE: XTA) with a decline of 3.84 percent, the biggest drop in London on the session, followed by Eurasian Natural Resources (LSE: ENRC), which fell 3.2 percent and Kazakhmys (LSE: KAZ) with a decline of 2.87 percent.

Gold miner Petropavlovsk (LSE: POG) was the only gainers among miners in London, adding 1.87 percent on the session.

Banks were lower, led by Lloyds Banking Group (LSE: LLOY) with a decline of 2.95 but inter-dealer money broker ICAP (LSE: IAP) added 1.69 percent.

The energy sector was mostly lower, as well, as oil prices declined, although Hansen Transmissions International (LSE: HSN), which makes gear boxes for wind turbines, added 0.81 percent for the best performance in the sector, while the worst results of the day in the sector came from pipeline systems manufacturer Wellstream Holdings, which dropped 2.93 percent.

The best performance in London came from Victrex (LSE: VCT), which makes heat resistant plastics, as it added 10.51 percent on the 250, while British Airways (LSE: BAY) turned in the best results on the 100 with a gain of 2.85 percent.

Home credit group International Personal Finance (LSE: IPF) was the worst performer on the 250 with a decline of 3.38 percent.

The FTSE Eurofirst 300 was down 0.93 percent to 1,087.99 while the Dax fell 0.81 percent to 6,171.83, the IBEX was 1.03 percent lower to 11,076.3 and the CAC-40 dropped 1.2 percent to 3,978.46.

Most markets in the Asia-Pacific region were lower on the session.

The Nikkei 225 was 1.1 percent lower to 11,168.2 in Tokyo, while the Topix index dropped 0.96 percent to 985.99 but the Mothers market managed to add 0.97 percent to 469.51.

The declines in Tokyo came as the yen strengthened and after machine orders in Japan dropped 5.4 percent in February from January, more of a decline than had been anticipated.

Additionally, new data showing an $11.5 billion drop in borrowing by US consumers n February led to worries that the recovery could be slower than hoped.

Japanese carmakers were lower as Toyota Motor (TYO: 7203) was 1.9 percent lower, while Mazda Motor (TYO: 7261) dropped 4.4 percent after Citigroup cut its recommendation on the auto manufacturer from “hold” to “sell”.

The real estate sector was lower after a private report said that Tokyo’s vacancy rate rose 8.75 percent in March, with Sumitomo Realty and Development (TYO: 8830) falling 0.8 percent while Mitsui Fudosan (TYO: 8801) was down 1.5 percent and Mitsubishi Estate (TYO: 8802) dropped 1.9 percent.

Hong Kong’s Hang Seng was down 0.28 percent to 21,867.04 while in Australia the S&P/ASX200 and the Sydney Ordinaries each dropped 0.46 percent, to 4,937.9 and 4,960.3 respectively.

The Taiex was 0.79 percent lower to 8,057.6, the Straits Times Index fell 0.83 percent to 2,963.19, the Shanghai composite was down 0.94 percent to 3,118.71 and the Sensex dropped 1.42 percent to 17,714.4.

On the other hand, South Korea’s Kospi added 0.42 percent to 1,733.78.

New York markets were slightly higher after declines early in the session as major retailers reported that sales were better than anticipated in March.

The Dow Jones Industrial Average added 0.07 percent in midday trade to 10,904.77, while at the same time the S&P 500 was up 1,183.7 and the Nasdaq Composite was 0.08 percent higher to 2,433.17.

While J.C. Penney (NYSE: JCP) and Abercrombie & Fitch (NYSE: ANF) reported that sales were lower than expected last month, Saks (NYSE: SKS), Nordstrom (NYSE: JWN), Costco (NAS: COST) and Target (NYSE: TGT) all reported that sales rose more than 10 percent in March.

Prices for crude oil and metals were both lower at midday in New York.

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