Vedanta Resources shares fall after closure of smelter in India

| September 29, 2010 | 0 Comments
Vedanta Resources shares fall after closure of smelter in India

European equities markets were lower Wednesday as concerns continued about the health of some economies in the region.

The FTSE 100 was down 0.16 percent to 5,569.27 in London, but the FTSE 250 was 0.1 percent higher to 10,562.53.

Vedanta Resources (LSE: VED) was the worst performer on the 100 and in the mining sector, dropping 4.25 percent after a court in India ordered its subsidiary, Sterlite Industries (India) Ltd, to shut its only smelter in the Asian country due to environmental violations.

Iron-ore miner Ferrexpo (LSE: FXPO) was the best performer in the mining sector, adding 3.47 percent.

Over on the 250, electric power generator Drax Group (LSE: DRX) was the worst performer as it fell 4.61 percent in a mostly lower utilities sector.

Buildings materials group Wolseley (LSE: WOS) added 6.35 percent to lead gains on the 100, while facilities manager and business services provider Regus (LSE: RGU) was up 7.6 percent for the best performance on the 250.

The energy sector was mixed, with gains led by BP (LSE: BP), which added 3.91 percent after it was reported to be trying to work out a settlement with the US government over its oil spill in the Gulf of Mexico earlier in the year, and after it said it will restructure its operations, including the creation of a new safety unit, while wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN) dropped the most in the sector, falling 3.62 percent.

Banks were down in London as concerns for the European economy continue, led by a 1.69 percent decline for HSBC Holdings (LSE: HSBC).

The pharmaceuticals sector also saw declines after AstraZeneca (LSE: AZN) dropped 1.89 percent after Royal Bank of Scotland cut its recommendation on the drug maker from “buy” to “hold”, while Shire (LSE: SHP) fell 1.22 percent and GlaxoSmithKline (LSE: GSK) was down 1.11 percent.

In the food and beverages sector, Dairy Crest Group (LSE: DCG) added 6.76 percent to lead gains in the sector, while Premier Foods (LSE: PFD) was 4.4 percent lower for the worst result in the sector.

Aerospace company Rolls-Royce Group (LSE: RR) added 3.47 percent as Morgan Stanley upgraded it to “overweight”.

Markets in the Asia-Pacific region were mixed, but the Shanghai Composite was 0.03 percent lower to 2,610.68 on declines for property developers on continuing worries that the government there could take more steps to cool property speculation, while India’s Sensex down 0.74 percent to 19,956.34 after a court there ordered a mining company to close one of its copper smelters.

Australian markets were also lower as banks declined as the Sydney Ordinaries dropped 0.49 percent to 4,694 and the S&P/ASX200 was 0.53 percent lower to 4,645.

The Nikkei 225 was up 0.67 percent to 9,559.38 in Tokyo, while the Topix index added 0.51 percent to 846.97 and the Mothers market gained 1.24 percent to 371.88.

The gains in Tokyo came on hopes that the outcome of the quarterly Tankan survey from the Bank of Japan will convince the Bank to take steps to shore up the economy, after the survey showed that business sentiment is up but that it will likely retreat again by the end of the year.

Traders, shippers and miners were all up after commodities prices saw gains in London yesterday.

Chipmaker Elpida Memory (TYO: 6665) added 8.1 percent after it conformed reports that it will start mass production of a new dynamic random access memory chip in December.

Shinsei Bank (TYO: 8303) was up 6.9 percent after it upped its net income target for the fiscal year ending in March 2012.

Among decliners, Tokyo Electric Power dropped 7.8 percent on reports that it will sell new shares to fund expansion overseas.

Markets seeing gains included the Straits Times Index, which added 0.28 percent to 3,106.03 in Singapore while South Korea’s Kospi was up 0.56 percent to 1,866.45, the Taiex was 0.63 percent higher to 8,240.89 and the Hang Seng gained 1.22 percent to 22,378.67.

Hong Kong’s markets were up on gains for property developers after the government sold a residential site there for $59 million, a much higher price than the parcel had been expected to fetch.

Henderson Land Development Co (SEHK: 0012) was up 1.7 percent while Hang Lung Properties Ltd (SEHK: 0101) gained 3.5 percent.

New York markets were lower in early afternoon trade as the Dow Jones Industrial Average and the S&P 500 were each down 0.1 percent, to 10,847.81 and 1,146.59 respectively, while the Nasdaq Composite was 0.09 percent lower to 2,377.54.

Crude oil prices were higher on unexpected declines in US stockpiles, while metals prices also saw gains as gold again traded in record territory, with December contracts at $1,311.20 per troy ounce at just before 1 p.m.

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