Vedanta Resources lower on bid talks

| August 12, 2010 | 0 Comments
Vedanta Resosurces lower on bid talks

European equities markets were mixed Thursday after data from the US Labor Department showed that first-time unemployment claims were up there by 2,000 last week to 484,000, against an expected decrease to 465,000, raising the fear that the US could be headed back into recession.

Additionally, separate figures showed that Eurozone industrial production was down 0.1 percent in June after it was expected to rise by 0.6 percent.

The FTSE 100 was up 0.4 percent to 5,266.06 in London, but the FTSE 250 dropped 0.67 percent to 9,788.31.

Vedanta Resources (LSE: VED) led declines on the 100 and in the mining sector as it dropped 7.25 percent after it said it is talking to Cairn Energy (LSE: CNE) about buying into Cairn’s India operations, marking a change in strategy for the copper and zinc miner.

The news sent Cairn’s shares up 1.8 percent.

Otherwise, most miners saw gains, led by iron-ore miner Ferrexpo (LSE: FXPO), which added 2.73 percent on the 250, while over on the 100 African Barrick Gold (LSE: ABG) was up 2.67 percent and Randgold Resources (LSE: RRS) gained 2.29 percent.

The biggest decliner on the 250 and in London generally was security printer and papermaker De La Rue (LSE: DLAR), which fell 9.45 percent.

The biggest gains on the 100 and 250 came from, respectively, Centrica (LSE: CAN), which added 3.25 percent to lead the energy sector higher, and auto parts and bicycle retailer Halfords Group (LSE: HFD), which led retailers higher with a gain of 3.68 percent.

Dana Petroleum (LSE: DNX) dropped 3.6 percent in a mostly lower energy sector after it said it cannot recommend that stockholders accept a bid from Korea National Oil Corporation.

Elsewhere in the energy sector, Melrose Resources (LSE: MRS) turned in the best performance of the session with a gain of 1.9 percent, while Hansen Transmissions International (LSE: HSN) dropped 4.25 percent for the worst performance.

GlaxoSmithKline (LSE: GSK) was 2.6 percent higher after a US panel recommended approval of epilepsy drug Potiga for use in the US.

The FTSE Eurofirst 300 was up 0.28 percent to 1,043.82, but the CAC-40 was down 0.2 percent to 3,621.07 and the Dax and the IBEX each dropped 0.31 percent, to 6,135.17 and 10,342.4 respectively.

Markets in the Asia-Pacific region were lower on worries about slowing economic growth around the world.

The Nikkei 225 fell 0.86 percent to 9,212.59 in Tokyo, while the Topix index was down 0.8 percent to 827.78 and the Mothers market dropped 1.66 percent to 827.78 as exporters were hurt as the yen strengthened versus the US dollar.

Consumer electronics manufacturer Panasonic (TYO: 6752) and chip-testing equipment maker Advantest (TYO: 6857) were each down 1.1 percent while Sony (TYO: 6758) fell 1.6 percent, electronics compnents manufacturer TDK Corp (TYO: 6762) was 1.7 percent lower and video games maker Nintendo (TYO: 7974) dropped 3.3 percent.

Elsewhere in the region, the Straits Times Index was down 0.75 percent to 2,927.04 in Singapore while Taiwan’s Taiex fell 0.83 percent to 7,829.79, the Hang Seng dropped 0.89 percent to 21,105.71 in Hong Kong and the Shanghai Composite was 1.23 percent lower to 2,575.48.

The S&P/ASX200 was also down 1.23 percent, to 4,400.9, in Australia, while the Sydney Ordinaries dropped 1.28 percent to 4,422.4.

South Korea’s Kospi was 2.07 percent lower to 1,721.75 as the Bank of Korea held interest rates steady.

In India, the Sensex managed to go against the general trend to add 0.02 percent to 18,073.9.

Wall Street was lower in midday trade on the bad news regarding unemployment claims and after a disappointing outlook from computer networker Cisco Systems (NAS: CSCO).

At just before 1 p.m. in New York, the Dow Jones Industrial Average and the S&P 500 had each dropped 0.4 percent, to 10,337.7 and 1,085.11 respectively, while the Nasdaq Composite was down 0.63 percent to 2,194.73.

Crude oil prices were more than $1 per barrel lower, but metals prices were up as gold added nearly $16 to trade at $1,214.80 per troy ounce in midday trade.

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