UK MARKET TALK ROUNDUP: SHARES LOSING

28th Jul 2010 08:29

Stocks on the fall in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 0729 GMT [Dow Jones]--Centrica's (CNA.LN) 1H 2010 earnings seen neutral for shares, says Citi analyst Peter Atherton. "The market expected good results and they delivered them," he says. Citi has a buy on the stock and a target of 310p. Centrica posted a 65% rise in adjusted operating profit for the half-year reflecting first-time contributions from Venture and British Energy acquisitions, the newly commissioned Langage gas power station and one of the coldest winters on record. Shares -2.2% at 301p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] 0614 GMT [Dow Jones] September bunds are down 0.09 at 127.60 and Richard Adcock at UBS says that as long as the contract trades below the 128.27, the bias would be for limited bounces and further price weakness. "A break below yesterday's 127.37 low will be the next bearish trigger exposing the market to first the June 21 session low at 127.12 and on breaks of this the 38% retracement point at 126.45," he says. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] 0707 GMT [Dow Jones] Morgan Stanley cuts its African Barrick Gold (ABG.LN) price target to 668p from 733p to reflect lower production guidance and higher cash cost guidance for '10 in the company's 1H numbers. Still, African Barrick has a balanced portfolio of assets, with the largest planned volume growth among London-listed gold miners, says the bank. Its strong liquidity position will not only help the company finance its organic growth, but should also provide deal-making flexibility, says the bank. Overweight. Shares -0.5% at 545p. ([email protected]) 0657 GMT [Dow Jones] Peripheral spreads have enjoyed a strong outperformance vs Germany in recent weeks and although fundamentals indicate spreads should be wider in the medium term, tightening is likely to continue in the short term, says Robert Crossley, Citigroup Global Markets strategist. Demand for European government bonds has been strong over the last four weeks despite no rise in yields, however, "Demand is currently not reflecting fundamentals but we expect this to continue in the near term." The 10-year Spanish/German yield spread is unchanged Wednesday at +128.5 bps, Italian/German is unchanged at +120 bps, Portuguese/German is 2 bps tighter ahead of the 5- and 15-year Portuguese auctions at +242 bps, Irish/German is 1 bp tighter at +236.5 bps and Greek/German is unchanged at +750.5 bps. ([email protected]) 0657 GMT [Dow Jones] HSI +0.9% at 21,164.31, led by gains in heavyweight HSBC (0005.HK), last +2.0% at HK$80.45 due to news Basel 3 proposals watered down. Prudential's associate director Alvin Cheung expects HSI may test 21,400-21,600 ahead if it manages to stay above 21,000. "Buying interest in HSBC ahead of its interim results (due Monday after market close) is expected to support the Hang Seng Index in the near-term." HK developers higher with government land auction expected to start soon (at 0700 GMT), with Cheung Kong (0001.HK) +0.8% at HK$94.45, Sino Land (0083.HK) +1.4% at HK$14.98. Elsewhere, Hang Lung Properties (0101.HK) down 1.2% at HK$33.25, HK Electric (0006.HK) +0.7% at HK$46.60, both released results during lunch break, kicking off HK earnings season. Volume modest at HK$41.69 billion. ([email protected]) 0656 GMT [Dow Jones] Rally in China bourses rubbing off on Singapore shares, with STI +0.4% at 2991.64 vs +0.1% at 2981.41 midday. If benchmark manages to clear 3000, next resistance at year-to-date high of 3037 set in April. Market breadth positive vs flat at midday, with almost 2 gainers for every decliner. "We're starting to get some momentum thanks to China. It's definitely a break from the dull session we had this morning," says local house dealer. Notable gainers among STI components include Singapore Airlines (C6L.SG), +2.8% at S$15.44, DBS (D05.SG), +1.3% at S$14.62, SembMarine (S51.SG), +1.3% at S$4.00, ComfortDelgro (C52.SG), +2.6% at S$1.59. Small caps meanwhile, remain most actively traded in market, led by Healthway Medical (5NG.SG), +2.7% at S$0.19, Informatics (I03.SG), +4.2% at S$0.125. ([email protected]) 0652 GMT [Dow Jones] EUR/JPY hits 114.74, highest since May 18, as non-Japanese hedge funds buy on cheap, with knock-on effect for USD/JPY, says senior trader at major Tokyo bank. "While Japan exporters' selling remained small (on expectations for the euro's further gains), dip-buying by non-Japanese players pushed up JPY-crosses broadly." Says BOJ board member Kamezaki's comments about FX have negligible impact on currency market as "such remarks are not particularly new." GBP/JPY hits 137.57, highest since May 13, GBP/USD reaches 1.5628, highest since Feb. 18. U.K.-based Tomkins PLC, global engineering and manufacturing group, agrees to be acquired by group of Canadian investors for about GBP2.89 billion, or nearly $4.5 billion, raising demand for GBP. Tips USD/JPY may rise to 88.40 vs last 88.05, EUR/JPY may gain to 115.00. ([email protected]) 0643 GMT [Dow Jones] India central bank's monetary policy statement appears hawkish, focused on taming double-digit inflation, which may lead to 100 basis point hike in key lending rate by March 2011, Morgan Stanley says in note. "We now expect the RBI to lift repo rate to 6.75% by March 2011 versus our earlier expectation of 6.25% (from 5.75% at present)," note says. House remains concerned over macro-economic stability risks such as building up of generalized inflation pressures. "In addition, a widening current account deficit has meant increasing risk of currency depreciation and rising cost of capital in the event of a sudden stop in capital inflows," note says. ([email protected]) 0643 GMT [Dow Jones] KLCI +0.2% at 1355.21; local dealer says market remains in consolidation phase, sentiment remains positive; index "seems to be well supported at the 1350 level;" providing base for further gains, dealer says. Notes thin volume (380 million shares) today may keep index within 1350-1360 range for rest of day. Market breadth positive with 339 advancers vs 262 decliners. Advancers include newly listed Ivory Properties (5175.KU) +29% at MYR1.29, MISC (3816.KU) +1.1% at MYR8.90, Proton (5304.KU) +1.6% at MYR4.52. Decliners include Mudajaya (5085.KU) down 4.7% at MYR5.31, Aeon (6599.KU) down 1% at MYR4.97. ([email protected]) 0636 GMT [Dow Jones] China's consumers have been spending more than previously believed, according to latest revisions to country's economic data, but newfound spending isn't enough to alter balance of power in economy still primarily driven by investment. Over past few months, China's statistical authorities revised several years of figures to reflect results of latest economic census, which uncovered much activity missed by earlier surveys, resulting in increase in household spending estimates by about $126 billion over eight years. China's statistical system, formed in planned-economy era, tends to be better at counting state enterprises' output than tracking consumption decisions of 1.3 billion people; but overall picture of economy where consumption accounts for unusually low share, investment unusually high one unchanged. Huge government stimulus program appears to have worsened imbalance. Though China's government leaders have long urged transition to economy driven by sustainable growth in household spending, rather than investment boom-and-bust cycles, it looks like they still have a long way to go. See: =WSJ BLOG/China Real Time Report: Revisions Show Stronger Consumption In China ([email protected]) 0635 GMT [Dow Jones] Bunds have opened slightly lower as European equities look set to open higher in line with their Asian peers. Strong corporate earnings and news that the Basel Committee will relax liquidity and capital rules have dragged on bunds, while yield spreads on peripheral government bonds versus bunds have also tightened in recent sessions. On Wednesday, Portugal sells bonds for up to EUR1.25 Bln and German CPI figures are also out. "The safe haven bid for Bunds may continue to unwind today should the Portuguese issuance go particularly well while today's key data - German CPI and US durable goods orders - do not look likely to prove particularly bond-friendly," says WestLB. September bunds are 0.09 down at 127.60 and the 10-year bund is down at 101.96 to yield 2.771%. ([email protected]) 0626 GMT [Dow Jones] ASIAN SUMMARY: Regional markets mostly higher; Nikkei +2.7%, Shanghai Composite +2.1%, S&P/ASX +0.7%, NZX-50 +0.5%, HSI +0.5%, STI +0.5%, Kospi +0.3%; but Sensex flat, SET flat. In FX markets, EUR/USD at 1.3021 vs 1.2997 late NY trade, EUR/JPY at 114.49 vs 114.37, USD/JPY at 87.94 vs 87.97. AUD/USD down at 0.8972 vs 90.18 just prior to country's 2Q CPI data coming in below expectations at +0.6% on-quarter, +3.1% on-year vs expectations of +1.0%, +3.4%, likely ensuring RBA to keep rates on hold at meeting next week, possibly until 2011. Australia Treasurer Wayne Swan says underlying inflation rate encouraging, continuing to moderate in line with official forecasts; also says while global economy's downside risks rising, Australia's outlook bright, Asia Pacific region's growth likely to remain strong for some time. BOJ policy board member Hidetoshi Kamezaki said central bank to take "proactive" steps to tackle deflation, suggesting BOJ prepared to keep extremely accommodative monetary policy while nation's economic outlook remains uncertain. South Korea's June current-account surplus totaled $5.04 billion at one-year high vs May's revised $3.82 billion. Indonesia's 1H actual investment by foreign and local investors +40% on-year at IDR92.9 trillion, says Gita Wirjawan, chairman of country's investment board. Philippine Bureau of Internal Revenue said collection next year expected to (MORE TO FOLLOW) Dow Jones Newswires July 28, 2010 03:29 ET (07:29 GMT)