London property investment sector declines

Equities markets in the Asia-Pacific region were mixed on Monday. Gainers included Hong Kong’s Hang Seng index, which added 0.32 percent to 23,365.56. In Taiwan, the Taiex gained 0.37 percent to 9,621.57, while in India the Sensex was 1.07 percent higher to 15,732.2. In China, meanwhile, the Shanghai Composite closed at 4,213.36, a gain of 3.81 percent. The gains in Shanghai came after the People’s Bank of China raised interest rates and cut taxes on interest income in order to convince investors there to keep more of their money in the bank. Indices seeing declines included the Straits Times index in Singapore, which dropped 0.44 percent to 3,635.35. In Australia, the Sydney Ordinaries fell 0.45 percent to 6,427.8 and the S&P/ASX200 was 0.49 percent lower to 6,390.4.

The Tokyo equities markets saw bigger declines as the Nikkei 225 and the Topix index each dropped 1.1 percent, to 17,963.64 and 1,757.29 respectively. The declines came after losses in New York on Friday and on polls over the weekend that showed Japan’s ruling party could see a defeat in next Sunday’s elections for the Upper House of its parliament. Some analysts believe that a major defeat could mean a resignation from Prime Minister Shinzo Abe that could send both equities and the yen lower, at least temporarily. Tokyo Electric Power (TYO: 9501) saw another loss, falling 2.7 percent to ¥3,230 in the wake of last week’s earthquake. Also seeing further losses was the telecommunications sector after some major mobile phone providers cut prices last week. KDDI (TYO: 9433) was 2.7 percent lower to ¥830,000, while NTT DoCoMo (TYO: 9437) dropped 2.8 percent to ¥176,000. Softbank (TYO: 9984), which did not announce a price cut, was down 3.4 percent to ¥2,575. The construction machinery sector was lower after a worse-than-expected quarterly report from US company Caterpillar (NSYE: CAT). Hitachi Construction Machinery (TYO: 6305) fell 1.2 percent to ¥4,980, while Komatsu (TYO: 6301) dropped 1.3 percent to ¥3,940.

Most European markets were higher on the session. The FTSE Eurofirst 300 was 0.58 percent higher to 1,609.07. In Madrid, the IBEX added 0.85 percent to 15,056.7, while the CAC-40 gained 0.87 percent to 6,009.16 in Paris and the Dax was 0.88 percent higher to 7,944.21 in Frankfurt. Carmakers saw gains, with DaimlerChrysler (FWB: DCX; NYSE: DCX; TYO: 7663) up 2.73 percent to €66.82 ahead of its second quarter report. Peugeot (Euronext: UG; OTC: PEUGY) added 1.78 percent to €65.10 after a broker raised its target share price. On the other hand, truck manufacturer Man (FWB: EDF1) dropped 0.31 percent to €107.20. In a related sector, tire maker Michelin (Euronext: ML) had the best day on the CAC-40 as it gained 2.75 percent to €104.73. Meanwhile, the best performer on the Dax was software group SAP (FWB: SAP; NYSE: SAP), which was 2.85 percent higher to €41.07 on rumors that it could be a target of private equity. In energy-related sectors, utility Suez (Euronext: SZE; NYSE: SZE) was up 1.42 percent to €41.40, while power generator Alstom (Euronext: ALO) gained 1.52 percent to €136.59. In the oil sector, Total (Euronext: FP; NSYE: TOT) added 1.82 percent to €60.55. The worst performances of the day came from Infineon (FWB: IFX; NYSE: IFX), which was 0.62 percent lower in Frankfurt to €12.87, and property company Unibail (Euronext: UL), which dropped 1.75 percent to €184.86 in Paris. Other decliners included chemical group Altana (FWB: ALT; NYSE: AAA), which was 0.34 percent lower to €17.61. IT services group Cap Gemini (Euronext: CAP) fell 0.55 percent to €55.64, while in the retail sector Carrefour (Euronext: CA) was down 0.19 percent to €53.26.

The markets were mixed in London, with the FTSE 100 adding 0.6 percent to 6,624.4 but the FTSE 250 falling 0.38 percent to 11,775. Insurer Friends Provident (LSE: FP) was the best performer on the 100 as it added 7.83 percent to 201p after it announced that it is in merger talks with Resolution (LSE: RSL). Elsewhere in the insurance sector, Legal and General (LSE: LGEN) was 2.71 percent higher to 155.3p. Barclay’s Bank (LSE: BARC; NYSE: BCS; TYO: 8642) gained 3.01 percent to 735p on the news that China will by a stake in the bank so that it can increase its bid for ABN Amro (Euronext: AAB; NYSE: ABN). The insurance sector grabbed the top spot on the 250 on the session as well, with special risk insurer Beazley Group (LSE: BEZ) up 5.95 percent to 169.25p. Retailer GAME Group (LSE: EBQ) also saw gains, adding 3.4 percent to 205.25p. The property investment sector had a rough day. Liberty International (LSE: LII) fell 1.7 percent to £11, while SEGRO (LSE: SLOU) - formerly Slough Estates - also dropped 1.7 percent, to 578p. British Land (LSE: BLND) was the worst performer on the 100, falling 3.1 percent to £13.14. Meanwhile, house builder Persimmon (LSE: PSN) was 1.69 percent lower to £11.64. Lifting equipment manufacturer FKI (LSE: FKI) had the worst day on the 250 as it dropped 8.27 percent to 113.75p. Property investment groups did no better on the 250 than they did on the 100, as Shaftesbury (LSE: SHB) was 3.99 percent lower to 577p and Workspace Group (LSE: WKP) fell 5.23 percent to 362.5p.

Wall Street was higher in midday trade as quarterly reports and mergers and acquisition news were in focus. The Dow Jones Industrial Average was 0.81 percent higher to 13,963.34, while the Nasdaq Composite had added 0.54 percent to 2,702.01 and the S&P 500 gained 0.76 percent to 1,545.79. The Russell 3000 index of small and mid-caps was up 0.52 percent to 840.82. Credit card provider American Express (NYSE: AXP) was 35 cents higher to $64.86 ahead of the release of its second quarter report, due after the close of trade on the day. In the pharmaceuticals sector, Merck (NYSE: MRK) said that it had seen its earnings increase by 12 percent in the quarter, sending it $3.90 higher to $52.92. Elsewhere in the sector, Pfizer (NYSE: PFE) gained 33 cents to $25.23 and Bristol-Myers Squibb (NSYE: BMY) added 60 cents to $32.14, but Schering-Plough (NYSE: SGP) dropped 12 cents to $31.37. In purchase news, offshore drilling contractor Transocean Inc. (NYSE: RIG) and GlobalSantaFe Corp. (NYSE: GSF) announced that they have made a deal to merge. Transocean was $6.28 higher to $116.25, while GlobalSantaFe gained $3.86 to $78.60. The company created by the deal will carry a market value of around $53 billion. In another deal, United Rentals (NYSE: URI) has agreed to be taken private by affiliates of Cereberus Capital Management in a cash deal worth $4 billion. Shares in United Rentals were trading $33.08 at mid-session