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Sunday 11th of July 2010
July 8, 2010    

Aggreko leads gains on FTSE 100

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by Elaine Frei
Aggreko leads gains on FTSE 100

European equities markets were higher Thursday after the International Monetary Fund revised its global growth outlook for this year, saying that the economy will grow by 4.6 percent in 2010, better than April’s prediction of 4.2 percent, although it held its forecast for growth next year at 4.3 percent.

Also helping gains were new numbers on US employment which showed that first-time jobless claims fell by 21,000 last week to 454,000.

The FTSE 100 was up 1.81 percent to 5,105.45 in London, while the FTSE 250 gained 1.64 percent to 8,719.18 after the Bank of England held UK interest rates steady for another month.

Aggreko (LSE: AGK), which rents power generators, added 5.4 percent to lead gains on the 100, while JKX Oil & Gas (LSE: JKX) was up 5.91 percent to lead both the 250 and London markets generally, but Essar Energy (LSE: ESSR) was the worst performer on the 100, dropping 1.3 percent, while support services group Connaught (LSE: CNT) was the biggest loser in London as it fell 5.85 percent.

Lloyds Banking Group (LSE: LLOY) added 4.31 percent as Bank of America Merrill Lynch reiterated its “buy” recommendation, saying that the bank’s share value could double in the next two years.

Insurer Old Mutual (LSE: OML) was up 3.39 percent in a mostly higher sector on reports that HSBC Holdings (LSE: HSBA) might bid for South African bank Nedbank Group Ltd (JSE: NED), which is majority owned by Old Mutual.

J Sainsbury (LSE: SBRY) was 0.96 percent lower after its CEO sold a stake in the company, slowing speculation that the Qatar Investment Authority is interested in bidding for the supermarket chain.

The FTSE Eurofirst 300 was up 0.79 percent to 1,013.94 while the Dax added 0.71 percent to 6,035.66, the IBEX was 0.93 percent higher to 10,080.5 and the CAC-40 gained 1.57 percent to 3,538.25.

Markets in the Asia-Pacific region were mostly higher, helped by Tuesday’s rally in US markets, but the Shanghai Composite fell 0.25 percent to 2,415.15 on renewed concerns that the Chinese government could further tighten monetary policy there.

The Nikkei 225 added 2.76 percent to 9.535.74 in Tokyo, while the Topix index gained 2.32 percent to 861.02 but the Mothers market dropped 0.33 percent to 392.13.

Carmakers and others with substantial sales in North America were higher on the session.

Toyota Motor (TYO: 7203), which has its biggest market outside of Japan in North America, was up 2.6 percent while Honda Motor (TYO: 7267), with over a fourth of its revenues coming from the Americas, added 3.7 percent and Mazda Motor (TYO: 7261) gained 3.9 percent.

In the consumer electronics sector, NEC (TYO: 6701) added 2.2 percent, while Sony (TYO: 6758), which makes over a fifth of its sales in the US, was 4.4 percent higher.

Camera and copier maker Canon (TYO: 7751), which gets more than a quarter of its revenues from the Americas, was up 3.3 percent.

Chip-related shares also saw gains, with Elpida Memory (TYO: 6665) up 4.5 percent, while Tokyo Electron (TYO: 8035) added 5.2 percent on reports that it will increase output as chip demand is expected to rise in Asia, and chip tester manufacturer Advantest (TYO: 6857) gained 6 percent.

The gains in Tokyo came even though machinery orders dropped by 9.1 percent, against an expected decline of only 3 percent.

The Hang Seng was up 0.97 percent to 20,050.56 in Hong Kong while Taiwan’s Taiex added 0.99 percent to 7,608.85, the Sensex was 1.03 percent higher to 17,651.73 in India, the Straits Times Index gained 1.26 percent to 2,897.15 in Singapore, and South Korea’s Kospi added 1.37 percent to 1,698.64.

The Sydney Ordinaries gained 2.25 percent to 4,374 in Australia, while the S&P/ASX200 was 2.4 percdent to 4,356.7 after a new report said that 45,900 more people had jobs in June, much more than the 15,000 new jobs analysts had expected and the unemployment rate held steady at 5.1 percent.

Wall Street was mixed in midday trade as the Dow Jones Industrial Average added 0.49 percent to 10,067.74 and the S&P 500 was up 0.22 percent to 1,062.65 but the Nasdaq Composite had dropped 0.02 percent to 2,159.05.

Crude oil prices were higher at midday, but off earlier highs, after the US Energy Information Administration reported that US crude oil inventories dropped by 5 million barrels last week, mostly due to supply interruptions tied to Hurricane Alex.

Copper prices were higher in midday trade in New York, but gold and silver both saw declines.

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