John Wood Group leads energy sector on purchase news

| December 13, 2010 | 0 Comments
John Wood Group leads energy sector on purchase news

European equities markets were higher on mergers and acquisitions news and after China decided over the weekend not to raise interest rates after all.

The FTSE 100 was up 0.82 percent to 5,860.75 in London, and the FTSE 250 added 0.46 percent to 11,333.2.

The energy sector was mostly higher on merger announcements in the sector, with John Wood Group (LSE: WG) doing best in the sector with a gain of 6.72 percent on news that the oil well support services group will buy Scotland-based PSN Ltd for $995 million to create the largest oilfield support services group in the world.

Meanwhile, Wellstream Holdings (LSE: WSM) added 5.76 percent after US conglomerate General Electric (NYSE: GE) said it will buy the pipelline systems manufacturer for the oil and gas industry for £955 million.

There were only three decliners in the energy sector, with the worst performance coming from Melrose Resources (LSE: MRS) as it dropped 1.85 percent.

Miners were also mostly higher, including a 4.12 percent gain for Kazakhmys (LSE: KAZ), which led gains on the 100, while two other miners, Fresnillo (LSE: FRES) and Antofagasta (LSE: ANTO), with gains of 3.98 percent and 3.07 percent respectively, were also among the five biggest gainers on the 100.

Kenmare Resources (LSE: KMR) added 4.85 percent for the best result in the mining sector, while gold miner Petropavlovsk (LSE: POG) was the worst performer in the sector as it dropped 1.9 percent.

Chemicals group Yule Catto & Co (LSE: YULC) was up 11.54 percent to lead gains on the 250 after it said it will buy a latex manufacturer for €443 ($585 million), and that it will fund the purchase with a rights offering.

Four of the biggest decliners on the 250 came from the house building sector as Redrow (LSE: RDW) dropped 5.46 percent for the biggest decline on the index, while Taylor Wimpey (LSE: TW) fell 2.98 percent, Berkeley Group Holdings (LSE: BKG) was 2.85 percent lower and Bovis Homes Group (SLE: BVS) was down 2.71 percent.

The worst performer on the 100 was aerospace and defense group Cobham (LSE: COB), which dropped 1.72 percent.

The FTSE Eurofirst 300 was up 0.31 percent to 1,129.12 while the IBEX added 0.29 percent to 10,151.2, the Dax was 0.33 percent higher to 7,029.39 and the CAC-40 gained 0.91 percent to 3,892.44.

Markets in the Asia-Pacific region were higher after expectations that China might raise interest rates over the weekend did not materialize as that nation choose for the moment to rely on another hike in reserve requirements for banks, set to go into force on 20 December, to try to rein in inflation there.

Consumer-price inflation was up 5.1 percent in November in China, while producer-price inflation climbed 6.1 percent, more than expected in both cases.

The Nikkei 225 was up 0.8 percent to 10.293.9 in Tokyo, while the Topix index added 1.03 percent to 897.4 and the Mothers market gained 1.95 percent to 409.22 as the yen weakened and rumors circulated that the government will extend a break on capital-gains taxes for another year.

The possibility that the capital-gains tax break will be extended helped brokers, as Nomura Holdings (TYO: 8604) was up 2.8 percent and Daiwa Securities Group (TYO: 8601) was 4 percent higher.

Exporters, including carmakers, saw gains on the weaker yen as Toyota Motor (TYO; 7203) added 0.6 percent and Honda Motor (TYO: 7267) gained 1.1 percent.

In the steel sector, Nippon Steel (TYO: 5401) was up 2.7 percent and JFE Holdings (TYO: 5411) added 3.3 percent after both companies were upgraded from “neutral” to “overweight” by JPMorgan Chase.

Taiwan’s Taiex was up 0.2 percent to 8,736.59, while in Australia the Sydney Ordinaries added 0.23 percent to 4,841.2 and the S&P/ASX200 was 0.24 percent higher to 4,757.1.

The Kopsi up 0.53 to 1,996.59 in South Korea while Hong Kong’s Hang Seng added 0.67 percent to 23,317.6, the Sensex gained 0.94 percent to 19,691.8 in India and the Shanghai Composite gained 2.88 percent to 2,922.95 in China.

On the other hand, the Straits Times Index dropped 0.1 percent to 3,182.32.

Markets were also higher in New York, where the Dow Jones Industrial Average was up 0.38 percent to 11,454.1 in early afternoon trade, while at the same time the S&P 500 also added 38 percent, to 1,245.14, while the Nasdaq Composite was 0.07 percent higher, to 2,,639.38.

Crude oil prices were higher, with West Texas Intermediate crude and Brent crude each up just less than 40 cents per barrel at last report.

Metals prices were also up, with copper up 9.5 cents to $4.21 per pound in New York trade after hitting its highest in two and a half years at $4.2175 per pound in New York trade and after hitting a record high at $9,235.25 per tonne during the day on the London Metal Exchange.

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