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21st of September 2010
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September 17, 2010    

Barclays Bank leads London sector lower

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by Elaine Frei
Barclays bank leads London sector lower

European equities markets were lower Friday on concerns that Irish banks could need help from the European Union and the International Monetary Fund, despite denials from both government sources and the IMF, and also after US consumer confidence dropped this month from last in a preliminary survey.

The FTSE 100 was down 0.57 percent to 5,508.45 in London, while the FTSE 250 dropped 0.01 percent to 10,440.98 after a Thomson Reuters/University of Michigan report put its US consumer confidence index at 66.6, down from 68.9 in August and against an expected rise to 70.

Barclays Bank led London banks lower, falling 2.83 percent after UBS cut its earnings estimate by 8 percent for this year, by 13 percent for 2011 and by 20 percent for 2012, citing a coming decline in Barclays’ investment banking business.

In Ireland, meanwhile, rumors that banks there could need a bailout sent Bank of Ireland (ISEQ: BKIR) down 5.3 percent, while Allied Irish Banks (ISEQ: ALBK), also hurt by the news that it will be removed from the Stoxx 600 index at the close of trade today, dropped 11 percent.

Back in the UK, power generator rentals group Aggreko (LSE: AGK) was the biggest gainer on the 100, adding 4.06 percent, while retailer SuperGroup (LSE: SGP) was up 12.02 percent to lead the 250 as it turned in the day’s best performance in London.

Among decliners, investment managers Man Group (LSE: EMG) dropped 4.41 percent to turn in the worst performance on the 100, while electronic components distributor Electrocomponents (LSE: ECM) was 7 percent lower to lead declines on the 250.

J Sainsbury (LSE: SBRY) added 1.98 percent after UBS raised its recommendation on the supermarket chain from “neutral” to “buy”, and upgraded its target share price, while among other retailers, DIY retailer Kingfisher (LSE: KGF) added 2.18 percent while JD Sports Fashion (LSE: JD) dropped 4.47 percent.

The pharmaceuticals sector was mostly lower, led by declines for Shire Plc (LSE: SHP), which was 2.97 percent lower on the 100 while Hikma Pharmaceuticals (LSE: HIK) dropped 4.13 percent on the 250.

Most markets in the Asia-Pacific region were higher Friday, but the Shanghai Composite was 0.15 percent lower to 2,598.69 as banks again saw declines on the possibility that the People’s Bank of China will raise interest rates.

Industrial and Commercial Bank of China (SSE: 601398) was 0.3 percent lower, while Agricultural Bank of China (SSE: 601288) dropped 1.1 percent.

The Nikkei 225 added 1.23 percent to 9,626.09 in Tokyo, while the Topix index was up 0.87 percent to 852.09 and the Mothers market gained 0.05 percent to 373.54 as the weaker yen helped exporters.

Consumer electronics manufacturer Sony (TYO: 6758) was up 1.4 percent while Honda Motor (TYO: 7267) added 1.86 percent, Toyota Motor (TYO: 7203) was 3.92 percent higher and camera maker Nikon (TYO: 7731) gained 3.89 percent.

The Straits Times Index added 0.3 percent to 3,076.37 in Singapore and Taiwan’s Taiex was up 0.72 percent to 8,158.33, while in Australia the S&P/ASX200 was 0.73 percent higher to 4,638.9 and the Sydney Ordinaries gained 0.75 percent to 4,685.1.

South Korea’s Kospi was up 0.86 percent to 1,827.35, the Sensex added 0.91 percent to 19,594.75 in India and Hong Kong’s Hang Seng gained 1.29 percent to 21,970.86.

New York markets were up slightly as news and results from the tech sector helped overcome concerns over the decline in US consumer confidence.

The Dow Jones Industrial Average was up 0.07 percent to 10,602.21 in midday trade, while the S&P 500 added 0.11 percent to 1,125.95 and the Nasdaq Composite was 0.52 percent higher to 2,315.17.

US software maker Oracle (NAS: ORCL) and Canada-based Research In Motion (NAS: RIMM), which makes the Blackberry smartphone, turned in positive quarterly results, while Texas Instruments (NYSE: TXN) upped both its quarterly dividend and its program to repurchase shares.

Crude oil prices were lower again, with October contracts for West Texas Intermediate crude trading $1.23 per barrel below Thursday’s close at 12:30 p.m. in New York, while at the same time metals prices were higher as gold once again traded in record territory at $1,278.50 per troy ounce.

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