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13th of September 2010
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September 9, 2010    

Royal Bank of Scotland leads London banks higher

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by Elaine Frei
Royal Bank of Scotland leads London banks higher

European equities markets were higher Thursday after the US Labor Department reported that new jobless claims were lower in the United States last week, adding confidence that the economy will recover from the recent recession.

The FTSE 100 was up 1.19 percent to 5,494.16 in London, while the FTSE 250 added 1.07 percent to 10,325.7 after the Bank of England held interest rates steady for another month.

Banks were higher in London, with Royal Bank of Scotland Group (LSE: RBS) leading the sector and turning in the best performance of the session on the 100, followed by a 4.61 percent gain for Barclays Bank (LSE: BARC), while Lloyds Banking Group (LSE: LLOY) added 3 percent after Barclays Capital upgraded the bank from “underweight” to “equal-weight” and UBS repeated its “buy” recommendation on Lloyds.

Home Retail Group (LSE: HOME) dropped 2.8 percent to lead decliners on the 100 after the DIY retailer issued a disappointing full-year forecast.

Over on the 250, engineering group Renishaw (LSE: RSW) added 13.85 percent for the best performance of the day there, while the biggest decline on the index came from engineering IT software maker Aveva Group (LSE: AVV), which dropped 5.27 percent.

ARM Holdings (LSE: ARM) added 3.97 percent on its launch of a new processor.

Most miners were higher, with gold miner Petropavlovsk (LSE: POG) adding 3.59 percent for the best result in the sector, while Gem Diamonds (LSE: GEMD) dropped 2.96 percent to lead declines in the sector.

In the energy sector, Premier Oil (LSE: PMO) added most as it advanced 2.15 percent, while Dana Petroleum (LSE: DNX) was 1.33 percent lower after Korea National Oil Corporation said it would not raise its offer for the oil and gas explorer.

The FTSE Eurofirst 300 was up 0.96 percent to 1,082.26 while the Dax added 0.93 percent to 6,221.52, the IBEX was 1.2 percent higher to 10,712.9 and the CAC-40 gained 1.22 percent to 3,722.15.

Markets in the Asia-Pacific region were mixed on the session, with more markets seeing gains than losses.

The Nikkei 225 added 0.82 percent to 9,098.39 in Tokyo, while the Topix index was up 0.71 percent to 826.84 and the Mothers market gained 0.6 percent to 376.91 as the yen weakened in relation to the euro and the US dollar.

The weaker yen helped exporters as robot maker Fanuc (TYO: 6954) added 1 percent while camera and copier manufacturer Canon (TYO: 7751) was up 1.1 percent and auto maker Toyota Motor (TYO: 7203) was 1.9 percent higher.

Traders advanced on gains in oil and metals prices as Mitsubish Corp (TYO: 8058), which makes 40 percent of its revenues from commodities trading, added 2 percent after an upgrade from “neutral” to “outperform” by Daiwa Securities Group, while Sumitomo Corp (TYO: 8053) gained 2.7 percent.

Tokyo’s real estate sector saw declines after office vacancy rates in the city were up in August.

Mitsubishi Estate (TYO: 8802) was down 1.9 percent while Nomura Real Estate Holdings (TYO: 3231) fell 3 percent and Mitsui Fudosan (TYO: 8801) dropped 3.6 percent.

Other gainers in the region included South Korea’s Kospi, which added 0.29 percent to 1,784.36, while the Straits Times Index was up 0.36 percent to 3,022.28 in Singapore, Hong Kong’s Hang Seng was 0.37 percent higher to 21,167.27, and the Sensex added 0.71 percent to 18,799.66.

The Sydney Ordinaries gained 0.94 percent to 4,621.3 in Australia, while the S&P/ASX200 was 0.99 percent higher to 4,582.2.

Decliners included Taiwan’s Taiex, which was down 0.2 percent to 7,835.54, while the Shanghai Composite dropped 1.44 percent to 2,656.35.

The declines in China came as investors worried that more gains in property prices there will mean more government measures to cool property speculation.

China Vanke Co (SZSE: 000002) dropped 3.4 percent on the Shenzhen exchange, while Poly Real Estate Group Co (SSE: 600048) was 4.1 percent lower in Shanghai.

Lenders were also hurt by the possibility of tighter lending policies, with China Construction Bank Corp (SSE: 601939) down 0.6 percent while Industrial and Commercial Bank of China (SSE: 601398) dropped 0.7 percent.

New York markets were higher in afternoon trade, with the Dow Jones Industrial Average up 0.2 percent to 10,407.67 while the S&P 500 had added 0.49 percent to 1,104.22 and the Nasdaq Composite was 0.37 percent higher to 2,237.17.

Prices for crude oil and metals were lower in afternoon trade in New York.

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