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October 5, 2010    

British Airways leads 100 on higher passenger traffic

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by Elaine Frei
British Airways leads 100 on higher passenger traffic

Equities markets were higher in Europe on optimistic data from the US services sector and after the Bank of Japan cut interest rates in an effort to help the economy there.

The FTSE 100 added 1.44 percent to 5,635.76 in London, while the FTSE 250 was up 1.12 percent to 10,681.96.

The gains came after the Institute for Supply Management’s non-manufacturing index notched a reading of 53.2 in September, up from 51.5 percent in August, more of a gain than had been expected and indicating an expansion of the sector that makes up around 90 percent of the US economy.

In addition, the Markit Economics/Chartered Institute of Purchasing and Supply index of the UK services sector was up to 52.8 in September from 51.3 in August, against analyst expectations that it would drop to 51, indicating that the services sector there also expanded.

British Airways (LSE: BAY) led gains on the 100 and in the travel and leisure sector as it added 6.48 percent, while easyJet (LSE: EZJ) gained 4.6 percent.

The gains for British Airways came on higher passenger traffic last month as first-class and business class demand added 4.3 percent and coach class traffic was up 0.7 percent for the airline’s first gains in passenger traffic since February.

Also in the travel and leisure sector, TUI Travel (LSE: TT) was up 4.01 percent on more bookings for winter travel, while travel agent Thomas Cook Group (LSE: TCG) also saw gains, adding 3.87 percent.

Wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN) was the best performer on the 250 as it added 7.45 percent to lead gains in a mostly higher energy sector, while the biggest decliner in the sector was JKZ Oil & Gas (LSE: JKX), which was 2.53 percent lower, followed by Wellstream Holdings (LSE: WSM), with a drop of 1.14 percent.

The mining sector was also mostly higher, led by a 4.22 percent gain for Anglo American (LSE: AAL), followed by Antofagasta (LSE: ANTO), which added 3.68 percent, while the worst performance of the three decliners on the sector came from Centamin Egypt (LSE: CEY), which was down 1.82 percent.

Computer services group Computacenter (LSE: CCC) added 5.93 percent after it was upgraded from “hold” to “buy” by Investec Securities.

Satellite communications group Inmarsat (LSE: ISAT) was 3.97 percent lower to lead declines on the 100 after Harbinger Capital Partners said it has sold part of its stake in the company and will not make a bid for the firm, while Premier Foods (LSE: PFD) was the worst performer on the 250 as it dropped 5.03 percent.

The FTSE Eurofirst 300 was up 1.43 percent to 1,066.12 while the Dax added 1.33 percent, the CAC-40 was 2.25 percent higher to 3,731.93 and the IBEX gained 2.58 percent to 10,651.2.

There was only 1 loser on the CAC-40 as Alstom (Euronext: ALO), an engineering firm with ties to the power generation and transportation, dropped 0.64 percent.

Asia-Pacific markets were mixed after both the Bank of Japan and the Reserve Bank of Australia made interest rate decisions.

The Nikkei 225 was up 1.47 percent to 9,518.76 in Tokyo, while the Topix index added 1.2 percent to 832.64 but the Mothers market dropped 1.47 percent to 363.56 after the Bank of Japan cut interest rates to around 0 percent and said it would keep the rate there until it determines that the nation’s economy is leaving deflation.

The Bank also said it will buy up to ¥5 trillion ($60 billion) in government bonds and other assets to aid recovery.

Semiconductors-related share were up as Elpida Memory (TYO: 6665) added 3.2 percent and Tokyo Electron (TYO: 8035) gained 4 percent on an increase in orders.

Printer and copier maker Canon (TYO: 7751) was up 0.4 percent while consumer electronics group Sony (TYO: 6758) added 1.4 percent and industrial robot maker Fanuc (TYO: 6954) was 2 percent higher.

In the financial sector, Mitsubishi UFJ (TYO: 8306) added 2.4 percent and Mizuho Financial Group (TYO: 8411) gained 3.6 percent.

The Hang Seng was up 0.09 percent to 22,639.14 in Hong Kong, hitting a ten-month high even though property developers were lower.

Henderson Land Development Co (SEHK: 0012) was down 1.1 percent while Sun Hung Kai Properties (SEHK: 0016) was 2.4 percent lower and Cheung Kong Holdings (SEHK: 0001) dropped 3 percent.

Also seeing gains was the Straits Times Index, which added 0.16 percent to 3,162.36 in Singapore.

Australia’s markets were lower, with the Sydney Ordinaries dropping 0.38 percent to 4,660.6 and the S&P/ASX200 down 0.4 percent to 4,606.9, after the Reserve Bank of Australia left interest rates unchanged at 4.5 percent in an unanticipated move as most analysts had expected a rate hike of a quarter of a percentage point.

Other decliners in the region included the Kospi, which was down 0.02 percent to 1,878.94 in South Korea, while India’s Sensex fell 0.33 percent to 20,407.71 and the Taiex dropped 0.55 percent to 8,200.43 in Taiwan.

China’s markets remained closed for a holiday.

New York markets were higher in midday trade as the Dow Jones Industrial Average added 1.57 percent to 10,920.35 while the S&P 500 was up 1.86 percent to 1,158.23 and the Nasdaq Composite was 2.11 percent higher to 2,394.02 on the new data showing that the US services sector expanded in September and on the interest rate cut by the Bank of Japan.

Crude oil prices were higher at midday in New York, while metals prices also advanced as gold was $23.60 higher to $1,340.40 per troy ounce, helped by the rate cut in Japan.

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