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June 14, 2011    

Avis Europe adds 58 percent on announcement

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by Elaine Frei
Avis Europe adds 58 percent on announcement

European equities markets were higher Tuesday after China reported that it’s industrial production increased by 13.3 percent in May, better than expected, while US retail sales were down 0.2 percent last month but had been expected to drop 0.5 percent.

The FTSE 100 was up 0.51 percent to 5,083.87 in London, while the FTSE 250 added 0.7 percent to 11,861.4 with car rental agent Avis Europe (LSE: AVE) adding 58.04 percent to lead gains on the 250 and in the mostly-higher travel and leisure sector after it said it will be acquired by US-based Avis Budget Group (NAS: CAR), which owns Avis Rent-A-Car System, Budget Rent-A-Car System and Budget Truck Rentals.

Most sectors were mostly higher on the session, but the mining sector was mixed and the food and beverage and utilities sectors were mostly lower.

Among miners, gains came on higher prices for copper, with Kazakhmys (LSE: KAZ) leading gainers as it added 3.81 percent, while Xstrata (LSE: XTA) saw the biggest declines as it dropped 3.07 percent, while Eurasian Natural Resources (LSE: ENRC) was down 1.93 percent after commodities trader Glencore International (LSE: GLEN) dropped 4.47 percent and led declines on the 100 on what one broker called a “disappointing” earnings report and after Glencore said that despite media reports, it isn’t planning to bid on ENRC.

Oil well builder and refurbisher Lamprell (LSE: LAM) was down 7.21 percent to lead declines in the energy sector and on the 250, while broadcaster ITV (LSE: ITV) was the best performer on the 100 and in the media sector as it added 4.36 percent.

Asset manager Schroders (LSE: SDR, SDRt) saw gains for both its voting and non-voting shares, up 3.93 percent and 3.53 percent respectively, on an upgrade from “neutral” to “overweight” from HSBC (LSE: HSBA).

The gains in Europe came even after Standard & Poor’s cut Greece’s debt rating from B to CCC yesterday, to the lowest in the world, citing a higher chance that it will default.

The FTSE Eurofirst 300 was up 0.82 percent to 1,100.87 while the CAC-40 added 1.5 percent to 3,864.58 and saw only 2 declines, the Dax was 1.69 percent higher to 7,204.79 with 3 decliners, and the IBEX gained 1.87 percent.

Most markets in the Asia-Pacific region were higher after new data from China showed that industrial production rose there by 13.3 percent in May, while inflation rose at its fastest rate in nearly three years to stand at 5.5 percent last month.

The Nikkei 225 was up 1.05 percent to 9,547.79 in Tokyo, while the Topix index added 1.3 percent to 822.86 but the Mothers market was 0.89 percent lower to 454.27 after the Bank of Japan kept interest rates at zero percent.

Utilities were higher, with Tokyo Electric Power (TYO: 9501) adding its daily limit of 25 percent after Japan’s Cabinet approved legislation that has the government guaranteeing loans by banks to an organization set up to make sure that Tepco can pay compensation to victims of the disaster at its Fukushima Dai-Ichi nuclear power plant, while Chubu Electric Power (TYO: 9502) was up 13 percent on media reports that it is close to obtaining a contract worth $1.5 billion to build a power plant in Oman.

There were also reports that Tokyo Electric Power could raise electricity rates by 16 percent in the new fiscal year to help pay for the rebuilding of it’s Fukushima plant, but other reports had Japan’s Trade Minister discounting the possibility that rates would go up that much.

Heavy machinery manufacturers, including robot makers, were up in Japan on China’s new numbers on industrial output.

India’s Sensex was up 0.23 percent to 18,308.7, Australia’s markets saw gains as they returned from a holiday Monday, with the Sydney Ordinaries adding 0.35 percent to 4,651.1 and the S&P/ASX200 up 0.5 percent to 4,585, the Shanghai Composite gained 1.1 percent to 2,730.04 after the government there raised reserve requirements on Chinese banks again, this time by 50 basis points, after the new numbers on inflation, Taiwan’s Taiex was up 1.33 percent to 8,829.21 and the Kospi gained 1.37 percent to 2,076.83 in South Korea, but the Hang Seng and the Straits Times Index each dropped 0.05 percent, to 22,496 and 3,057.39 respectively.

New York equities markets were higher after US retail sales data wasn’t as bad as expected, with the Dow Jones Industrial Average up 1.15 percent to 12,090.7 while the S&P 500 added 1.38 percent to 1,289.33 and the Nasdaq Composite was 1.52 percent higher to 2,679.74, all in midday trade.

Crude oil prices were higher at midday in New York, with West Texas Intermediate crude up $1.41 per barrel for July contracts, while at last report from London Brent crude had added $1.10 per barrel.

Metals prices were also higher, with copper adding nearly 3 percent, or 12 cents, to $4.17 per pound on data showing industrial production up in China last month, while gold and silver were both slightly higher.

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