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Tuesday 15th of June 2010
June 11, 2010    

BP up despite higher estimate of leakage from well

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by Elaine Frei
BP up despite higher estimate of leakage from well

Most European equities markets were higher on Friday on mostly good economic news from China and the United States.

Industrial output and retail sales were both reported up in China, although inflation there was also up at its fastest rate in over a year and a half, while a new Reuters/University of Michigan survey showed that US consumer confidence is up in early June by more than anticipated, at 75.5 in June from 73.6 in May, but Us retail sales were down 1.2 percent in May for its biggest decline in eight months.

The FTSE 100 added 0.61 percent to 5,163.68 in London, while the FTSE 250 was up 0.55 percent to 9,662.59.

BP (LSE: BP) was in focus again, adding 7.22 percent to lead the energy sector and all gainers on the 100 despite new, higher, estimates of how much oil is escaping from its leaking well in the Gulf of Mexico, as it was said to be considering cancelling its second quarter dividend or, short of that, deferring it to a later date or paying all or part of it as an IOU.

While new estimates are that BP’s leaking well was losing up to 40,000 barrels per day before capping and could still be leaking up to 25,000 barrels per day after being capped, UK Prime Minister David Cameron defended the company from what has been characterized as “Britain-bashing” by US President Barack Obama, saying that it is in the best interests of both the US and the UK that BP retain stability.

There was only one decliner in the London Energy Sector as oil and gas explorer Afren (LSE: AFR) dropped 3.12 percent.

Brit Insurance Holdings (LSE: BRE) led London gains as it added 20.71 percent on the 250 after it rejected a bid from a private equity group, but the sector was mixed with Prudential (LSE: PRU) seeing the biggest decline among insurers as it dropped 2.64 percent.

Household chemicals group McBride (LSE: MCB) led declines on the 250, falling 3.55 percent, while over on the 100 power generator rental business Aggreko (LSE: (AGK) dropped 3.94 percent for the biggest decline in the London session.

Miners were mostly lower, led down by Aquarius Platinum (LSE: AQP), which fell 1.85 percent, but nickel miner Talvivaara Mining Company (LSE: TALV) gained 2.86 percent after it added a production line at its metals recovery plant in order to help reach production goals.

The FTSE Eurofirst 300 was up 0.43 percent to 1,018.47 while the CAC-40 added 1.11 percent to 3,555.52 and the IBEX gained 3.95 percent to 9,561.7, but the Dax dropped 0.14 percent to 6,047.83.

The IBEX was up on gains for Spanish banks as Banco Santander (BMAD: SAN) added 3.8 percent, Banco Bilbao Vizcaya Argentaria (BMAD: BBVA) was up 5.5 percent, Banco de Sabadell (BMAD: SAB) was 8.3 percent higher after it said it is considering the takeover of a rival bank, and Bankinter (BMAD: BKT) gained 8.5 percent on a broker upgrade from “underweight” to “overweight”.

Markets in the Asia-Pacific region were higher Friday on hopes that Europe’s debt problems will not hurt growth around the world.

The Nikkei 225 added 1.7 percent to 9,705.25 in Tokyo, while the Topix index was up 1.13 percent to 866.44 and the Mothers market gained 0.69 percent to 420.21.

Exporters were higher as the yen weakened in relation to the euro.

Consumer electronics giant Sony (TYO: 6758) and camera and copy-machine maker Canon (TYO: 7751) each added 1.9 percent on the session, while Sharp Corporation (TYO: 6753) was up 3.9 percent.

Industrial robot manufacturer Fanuc (TYO: 6954), which received 17 percent of its revenues from Europe in the last fiscal year), was 1.5 percent higher, while chipmaker Elpida Memory (TYO: 6665) gained 0.7 percent on a raised forecast for chip sales growth from the Semiconductor Industry Association.

Banks were higher in Tokyo, with Sumitomo Mitsui Financial Group (TYO: 8316) adding 1.4 percent while Mitsubishi UFJ (TYO: 8306) was up 3.1 percent and Shinsei Bank (TYO: 8303) gained 3.3 percent.

Chinese banks listed in Shanghai and Hong Kong were also up, after new data showed that the value of new loans in China gained more than had been anticipated, as Industrial & Commercial Bank of China (SSE: 601398) was up 0.7 percent in Shanghai while Hong Kong-listed shares of Bank of Communications Co (SEHK: 3328) and China Merchants Bank Co (SEHK: 3968) each added 2.4 percent.

The Shanghai Composite was up 0.29 percent to 2,569.94, while the Straits Times Index added 0.6 percent to 2,796.29, the Sensex was 0.84 percent higher to 17,064.95, the Hang Seng gained 1.22 percent to 19,872.38, and the Kospi was up 1.43 percent to 1,675.34.

In Australia, the Sydney Ordinaries added 1.53 percent to 4,516.5 and the S&P/ASX200 was 1.58 percent higher to 4,505.5.

Taiwan’s Taiex gained 1.64 percent to 7,299.49.

Wall Street was mixed in midday trade as the Dow Jones Industrial Average had dropped 0.33 percent to 10,138.82, while at the same time the S&P 500 was down 0.29 percent to 1,083.65, but the Nasdaq Composite had added 0.28 percent to 2,224.92.

The price of crude oil was down nearly $2 per barrel in New York at midday, while silver and copper prices were up but gold prices were lower.

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