Markets & Finance

Asia Closes Lower, Europe Mixed


European stock markets were mixed on Thursday as Wall Street headed south as data from the Conference Board's index of leading indicators fell 0.3%, the first decline in two months, reflecting a weak dollar, higher energy prices and business caution. The weaker-than-expected index offset a good jobs report and strong results from Wal-Mart and HP. In London, the Financial Times Stock Exchange 100 gained 4.20 points, or 0.08%, to close at 5057.40. The FTSE closed a touch higher following another round of trading statements, with Reed Elsevier particularly upbeat. Wall Street opened lower due to a fall in the U.S. leading Indicators. At home, publishing group Reed Elsevier led the FTSE100 as it reported fiscal year profits of 1.027 billion pounds and said it had expected 5% organic revenue growth in 2005. Cairn Energy also jumped after saying that gross production in 2005 is likely to exceed that of 2004, given new drilling programmes recently commenced in the Sangu and Lakshimi gas fields. Beverage firm Diageo reported first-half profits of 1.235 billion pounds and earnings per share of 29 pence. Elsewhere, mmO2 rose on growing positive sentiment after several brokers recently increased their target prices. Finally, BP and Shell profited on WTI's crude price rally.

Germany's DAX gained 0.91 points, or 0.02%, to close at 4369.68. While Frankfurt's Dax closed virtually unchanged on the session, its younger sibling MDax closed almost 0.6% better following solid results from several of its key members. Wall Street reacted negatively to macro data, which showed a jump in January import prices and jobs data, which unexpectedly declined to a 4-year low. Leading indicators were also lower. Locally, dealers are now concerned that the US reporting season is almost at an end and markets lack fresh impulse and may revert to tracking the dollar and oil. Stocks were on the move today included the Deutsche Boerse, which gained after UBS and HVB raised their respective price targets ahead of results this coming Monday. Thyssen benefited from solid results from peer Arcelor and a hike in UBS's price target to 19.5 euro. Merck gained after saying it will raise its dividend by 40% to 1.05 euro, and is rewarded for adding increased transparency to its numbers. DTelekom dipped after announcing tariff cuts in its T-Com voice business. A report shows it lost market share to peers in 2004.

In France, the CAC-40 lost 3.52, or 0.09%, to close at 4005.50 The CAC40 (-0.09%) ended a shade lower on Thursday Paris as Wall Stret headed south on macro data and lower leading indicators. Paris lost steam on the back of Wall Street's decline. France Telecom and tech stocks STM and Alcatel weighed on the benchmark index. Total remained upbeat after raising its dividend by 15% to 3.0 euro, vs. expectations of a 10% rise only, following a record fourth quarter. L'Oreal was the best performer in the CAC-40 after bettering expectations for fiscal 2004. The cosmetics group painted a pretty picture with a 12% dividend increase to 0.82 euro and a boost to its share buyback programme to 1.25 billion euro, vs. 1.0 billion euro. In the broader market, Air France-KLM's third quarter was in line with expectations.

Asian markets were lower on Thursday. In Japan, the Nikkei 225 lost 18.96 points, or 0.16%, to close at 11,582.72. Tokyo shares were led lower by Daikin, Sumitomo Realty, and TDK. Crude oil prices rose above $48 in New York and OPEC said global oil consumption will increase more than expected this year. Japan Petroleum climbed 2.2% and Nippon Oil jumped 1.5%. Bank of Japan will announce the outcome of its two-day policy meeting later today and it is expected to keep interest rates at almost zero after a government report showed that the Japanese economy fell into a recession and extended six years of deflation. Toyota Motor declined 1.2% and Taiyo Ink dropped 0.5%. Yahoo Japan announced a stock split plan that will take effect on May 20.

The benchmark Hang Seng Index declined 47,67 points, or 0.34%, to 13,967.82. Among 33 blue chips, 21 closed lower while six rose. The top HSI percentage laggard was Lenovo, whereas the top gainer was CNOOC. Wheelock & Co recovered from its 3.7% slump on Wednesday.

Canada's benchmark TSX/S&P lost 25.38 points, or 0.26%, to close at 9,614.21.


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