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03rd of July 2011
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Lloyds Banking Group leads sector, FTSE 100 on job cuts to save money

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by Elaine Frei
Lloyds Banking Group leads sector, FTSE 100 on job cuts to save money

European equities markets were higher after Greece’s parliament passed legislation allowing implementation of austerity measures passed earlier in the week, enabling the European Union and the International Monetary Fund to continue to send bailout funds to the debt-troubled nation.

Additionally, in good news from the United States, the Bloomberg Consumer Comfort Index was up unexpectedly last week, while the Institute for Supply Management said its business index was up against an expected decline.

The FTSE 100 added 1.53 percent to 5,945.71 in London, while the FTSE 250 gained 1.14 percent to 11,934 as the banking sector was higher, led by Lloyds Banking Group (LSE: LLOY) with an advance of 9.73 percent after it said it will reduce costs by cutting 15,000 jobs, most of them in the UK, and by withdrawing from more than half of its overseas units in order to concentrate on business in the UK.

In cutting jobs, Lloyds joined other banks in Europe and the United States in cutting positions in order to save money, although Lloyds’ cuts are much more extensive than job cuts by other banks.

Besides the London banking sector, insurers also saw all gains on the session, while the chemicals sector and homebuilders each saw only one decline, and miners, the media and real estate sectors and utilities saw just two decliners each, and there were four losers in the energy sector, while the food and beverage sector, retailers, the telecommunications sector and the travel and leisure sector were all mixed.

Lloyds was the biggest gainer on the 100, while the London Stock Exchange Group (LSE: LSE) added 10.98 percent and lead advances on the 250 on rumors that it will become a bids target after backing out of a proposed deal with the TMX Group (TSX: X) of Canada.

Petrofac Ltd (LSE: PFC), which provides construction and chemical engineering services to the energy sector, was down 2.01 percent for the biggest decline on the 100, but oil explorer and producer BG Group (LSE: BG) led gains in the sector, adding 4.74 percent after it doubled its estimate of reserves in Santos Basin, offshore from Brazil, to around 6 billion barrels of oil.

Food manufacturer Premier Foods (LSE: PFD) dropped 22.3 percent to lead declines on the 250 on a reduced profits forecast.

The FTSE Eurofirst 300 was up 1 percent to 1,109.72 while the Dax added 1.13 percent to 7,376.24, the CAC-40 was 1.48 percent higher with just four decliners, and the IBEX added 2.13 percent to 10,359.9 and saw no declines for the second session in a row.

Markets in the Asia-Pacific region were higher as sentiment continued to be more optimistic in the wake of Greece’s passage of austerity measures, reducing the chances of an early default by the nation.

The Nikkei 225 added 0.19 percent to 9,816.09 in Tokyo, while the Topix index was up 0.61 percent to 455.2 but the Mothers market was 0.15 percent lower to 455.2 as banks advanced after Deutsche Bank upgraded the sector from “market weight” to “overweight” and utilities were up on news reports that the town of Genkai has approved the restart of nuclear reactors, easing worries that local governments could oppose nuclear power generation and hurt the sector.

Chubu Electric Power (TY0: 9502) was up 2.4 percent while Kyushu Electric Power (TYO: 9508) added 4.2 percent and Kansai Electric Power (TYO: 9503) gained 4.6 percent.

Consumer electronics manufacturer Sony (TYO: 6758), which makes 20 percent of its sales in Europe, added 3 percent on the session.

South Korea’s Kospi was up 0.3 percent to 2,100.69, the Sensex added 0.81 percent to 18,845.9 in India, Taiwan’s Taiex was 0.92 percent to 8,652.59, the Shanghai Composite gained 1.23 percent to 2,762.08, the Straits Times Index was up 1.32 percent to 3,120.44 in Singapore, Hong Kong’s Hang Seng added 1.53 percent to 22,398.1, and Australia’s markets advanced as the S&P/ASX200 was 1.73 percent higher to 4,608 while the Sydney Ordinaries gained 1.75 percent to 4,659.8.

New York equities markets were higher in midday trade in New York, with the Dow Jones Industrial Average up 1.06 percent to 12,391, while the S&P 500 had added 0.88 percent to 1,318.87 and the Nasdaq Composite was 1.08 percent higher to 2,770.01.

Crude oil prices were lower at midday in New York, with August contracts for West Texas Intermediate crude down 76 cents to $94.01 per barrel while recent reports had Brent crude $1.30 lower to $111.10 per barrel on the ICE Futures Europe exchange in London.

Silver and copper prices were higher in midday trade in New York, but gold had dropped $3.90 to $1,506.50 per troy ounce.

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News posted: June 30, 2011

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