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Friday 29th of October 2010
October 27, 2010    

Kazakhmys, Vedanta Resources lead miners lower in London

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by Elaine Frei
Kazakhyms, Vedanta Resources lead miners lower in London

European equities markets were lower Wednesday on disappointing corporate quarterly results, although Deutsche Bank (FWB: DBK) did not post as much of a loss as had been anticipated, and on concerns about when the US Federal Reserve will put new measures into place to help economic recovery and whether those moves will be enough.

The FTSE 100 was down 1.07 percent to 5,646.02 in London, while the FTSE 250 dropped 1.04 percent to 10,827.3.

The mining sector was lower on another decline in copper prices, with four of the top five losers on the 100 from the sector, led by Kazakhmys (LSE: KAZ) with a drop of 5.03 percent while Vedanta Resources (LSE: VED) was down 4.75 percent, Xstrata (LSE: XTA) fell 3.84 percent and Lonmin (LSE: LMI) was 3.56 percent lower.

Talvivaara Mining Company (LSE: TALV) was the only gainer in the mining sector, adding 2.54 percent after it said that its third-quarter revenues should be substantially above those from the first and second quarters on higher prices for nickel.

There were only three gainers in the energy sector, led by Hansen Transmissions International (LSE: HSN) as the wind turbine gearbox manufacturer added 2.22 percent, followed by a 1.16 percent gain for Heritage Oil (LSE: HOIL) and an advance of 0.76 percent for Amec (LSE: AMEC), which provides engineering services to the energy sector.

The biggest decline in the energy sector came from SOCO International (LSE: SIA), which dropped 10.65 percent to lead declines on the 250 after it said that another well in the Democratic Republic of Congo did not yield any commercial quantities of oil or gas.

Banks were mixed in London, but constituents of the sector still led gains on the 100 as Barclays Bank (LSE: BARC) added 1.78 percent and Lloyds Banking Group (LSE: LLOY) gained 1.66 percent on the better than expected results from Deutsche Bank, but Standard Chartered (LSE: STAN) fell 0.81 percent and HSBC Holdings (LSE: HSBA) dropped 0.47 percent.

The best performance on the 250 came from data centers operator Telecity Group (SLE: TCY), which added 4.05 percent, followed by auto parts retailer Halfords Group (LSE: HFD), which was 3.96 percent higher on broker upgrades.

The FTSE Eurofirst 300 was down 0.7 percent to 1,082.33 while the Dax added 0.69 percent to 6,568, the IBEX was 0.9 percent higher to 10,700.1 and the CAC-40 gained 0.96 percent to 3,815.77.l

Asian markets were mostly lower on concerns that the US Federal Reserve will not go far enough after media reports that said that it will introduce new measures to help the support the economy at its next meeting.

The Nikkei 225 was up 0.1 percent to 9,387.03 in Tokyo, but the Topix index fell 0.02 percent to 817.76 and the Mothers market dropped 0.18 percent to 350.91.

Exporters, including automobile manufacturers, saw gains as the yen weakened, with Toyota Motor (TYO: 7203) adding 1.5 percent while Honda Motor (TYO: 7267) was up 1.9 percent and Fuji Heavy Industries (TYO: 7270) gained 5.3 percent after both Goldman Sachs and JPMorgan Chase raised their target share prices on the manufacturer of Subaru automobiles.

Oil-related companies were lower after oil prices fell a bit, with Inpex (TYO: 1605) down 0.3 percent while JX Holdings (TYO: 5020) was 1.7 percent lower.

Banks and brokers saw declines as Sumitomo Mitsui Financial Group (TYOP 8316) fell 0.9 percent and Mitsubishi UFJ (TYO: 8306) was down 1.8 percent while Nomura Holdings (TYO: 8604) was 1.1 percent lower and Daiwa Securities Group (TYO: 8601) dropped 2.6 percent.

The Kospi fell 0.51 percent to 1,909.54 in South Korea and Taiwan’s Taiex was down 0.63 percent to 8,291.04 in Taiwan, while in Australia the S&P/ASX200 was 0.85 percent lower to 4,648.1 and the Sydney Ordinaries dropped 0.86 percent to 4,720.5.

India’s Sensex was down 1.07 percent to 20,005.4 while the Straits Times Index fell 1.21 percent to 3,124.38 in Singapore, the Shanghai Composite was 1.46 percent lower to 2,997.05 and the Hang Seng dropped 1.85 percent to 23,164.6 in Hong Kong.

New York markets were lower in midday trade, with the Dow Jones Industrial Average down 1.2 percent to 11,035.7 while at the same time the S&P 500 had dropped 0.98 percent to 1,174.03 and the Nasdaq Composite was 0.57 percent lower to 2,483.04.

The price of crude oil was down, with West Texas Intermediate crude falling $1.34 to $81.21 per barrel at midday on a new report from the US Energy Information Administration which showed crude stockpiles up 5 million barrels last week against an expected gain of only 1.5 million barrels.

Metals prices were also lower, with copper down 9.5 cents per pound while silver had dropped 37 cents per troy ounce and gold was $15.60 per troy ounce below Tuesday’s close.

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