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November 16, 2010    

Punch Taverns, Enterprise Inns lead travel & leisure sector lower

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by Elaine Frei
Punch Taverns, Enterprise Inns lead travel & leisure sector lower

European equities markets were lower Tuesday on concerns about the possibility monetary policy tightening yet to come in China as a way to control inflation, and as Ireland discussed issues related to a a bailout of its economy with European officials and the International Monetary Fund.

The FTSE 100 was down 2.38 percent to 5,681.9 in London, while the FTSE 250 dropped 1.88 percent to 10,717.7.

The travel and leisure sector was lower, with pubs operators having the roughest time of it as Punch Taverns (LSE: PUB) led declines in the sector and on the 250, falling 10.28 percent, followed by a 9.4 percent decline for Enterprise Inns (LSE: ETI) after it said revenues for the full year were down by 7.3 percent.

The only gainer in the travel and leisure sector was casino and online gaming company Rank Group (LSE: RNK), which added 0.23 percent.

Miners were big decliners as metals prices dropped on concerns that China’s moves to fight inflation will result in falling demand in the world’s largest consumer of metals, with all but a few miners seeing declines of 3 percent or more.

Iron-ore miner Ferrexpo (LSE: FXPO) was the biggest loser in the sector, falling 8.1 percent on the 250, followed by a 6.9 percent decline for gold miner Petropavlovsk (LSE: POG).

In addition, the four biggest decliners on the 100 were all miners, led by gold and silver miner Fresnillo (LSE: FRES), which was down 6.33 percent while Kazakhmys (LSE: KAZ) fell 6.14 percent, Antofagasta (LSE; ANTO) was 5.49 percent lower and Xstrata (LSE: XTA) dropped 5.1 percent.

The energy sector was also lower, although three companies managed gains, led by wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN), which added 1.75 percent.

The biggest decline in the energy sector came from oil and gas explorer Tullow Oil (LSE: TLW), which as down 4.55 percent.

The best performer on the 100 was beverage can and plastic packaging manufacturer Rexam (LSE: REX), with a gain of 2.32 percent, while TalkTalk Telecom Group (LSE: TALK) did the best on the 250, adding 6.18 percent in a mixed telecommunications sector which saw BT Group (LSE: BT.A) drop 2.48 percent for the worst performance in the sector.

The FTSE Eurofirst 300 was down 2.22 percent to 1,087.62 while the Dax fell 1.87 percent to 6,663.24 and saw only three gainers, the IBEX was 2.46 percent lower to 10,095.4 and the CAC-40 dropped 2.63 percent to 3,762.47, with no gainers at all on the Paris index.

Most markets in the Asia-Pacific region were lower on the possibility that governments could do more to slow inflation.

The Nikkei 225 was down 0.31 percent to 9,797.1 in Tokyo, while the Topix index fell 0.45 percent to 847.77 and the Mothers market dropped 0.87 percent to 365.38.

Despite the declines, some Japanese exporters were helped by yesterday’s report from the US Commerce Department on retail sales in the United States, which were up 1.2 percent in October, mostly on the sales of motor vehicles.

A weaker yen also helped gains such as that by construction machinery manufacturer Komatsu (TYO:6301), which was up 1.22 percent, while consumer electronics giant Sony (TYO: 6758) added 1.83 percent and Mazda Motor (TYO: 7261) gained 2.75 percent.

Commodites trader Mitsubishi Corporation (TYO: 8058), however, dropped 0.19 percent as commodities prices declined, while oil company Inpex (TYO: 1605) was 2.08 percent lower as oil prices slipped.

Other decliners in the region included the Straits Times Index, which was down 0.76 percent to 3,212.1 in Singapore, while South Korea’s Kospi fell 0.77 percent to 1,899.13, the Hang Seng was 1.39 percent lower to 23,693 in Hong Kong and India’s Sensex was down 2.19 percent to 19,865.1.

The Shanghai composite dropped 3.98 percent to 3,894.54 in China, where the government said that foreigners wishing to buy a home will have to prove they don’t own other property there and that they have at least a year’s work in China, while foreign companies will have to show that they are registered in any city where they wish to purchase offices.

The new rules pushed the real estate sector down as Shenzhen-listed China Vanke (SZSE: 000002) dropped 4.3 percent and Poly Real Estate Group (SSE: 600048) was 5.5 percent lower in Shanghai.

Australia’s markets saw gains as the Sydney Ordinaries added 0.2 percent to 4,782.8 and the S&P 500 gained 0.26 percent to 4,700.3, while in Taiwan the Taiex was 0.87 percent higher to 8,312.21.

New York markets were also lower, with the Dow Jones Industrial Average and the Nasdaq Composite each down 1.89 percent, to 10,989.9 and 2,466.26 percent, while the S&P 500 dropped 1.85 percent to 1,175.6.

Crude oil prices were lower, with West Texas Intermediate crude trading at $82.46 per barrel in New York, down more than $2 per barrel, while Brent crude was down nearly $2 per barrel in London trade.

Metals prices were also down, with gold down more than $37 in midday trade, while copper was down 21 cents per pound, or more than 5 percent, in New York trade.

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