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UK markets finish with small gains, Man Group and Autonomy lead gainers, ARM drops 4%

2nd Sep 2010, 5:35 pm
UK markets finish with small gains, Man Group and Autonomy lead gainers, ARM drops 4%

London`s index of the top 100 companies listed on the London Stock Exchange, the FTSE 100, squeezed out a small gain of 0.1% today, boosted in part by a decent start for equities on Wall Street.


US equities were off to a moderately better start after the US Labor Department reported that initial claims for unemployment benefits decreased by 6,000 to 472,000. Continuing claims dropped by 23,000 to 4.456 million.


US markets were also boosted by confirmation of a $4 billion takeover offer for Burger King (NYSE:BKC) from private equity house 3G Capital and confirmation that Dell (NASDAQ:DELL) would not meet Hewlett-Packard`s (NYSE:HPQ) $33 per share offer for data storage specialist 3PAR (NYSE:PAR).  


The increased merger and acquisition (M&A) activity in recent weeks has helped lift sentiment in the market and ignited speculation of additional deals as blue chip stocks utilize their strong balance sheets.

In response to the takeover deals, hedge fund manager Man Group (LSE:EMG, PINK:MNGPY) and software developer Autonomy Corp (LSE:AU, PINK:AUTNF) rose 6% and 4% respectively.   Defence and aerospace systems manufacturer BAE Systems (LSE:BA, PINK:BAESY) climbed 3.3%.


Other notable gainers included hospitality company Whitbread (LSE:WTB) which received a boost from the Burger King news, insurer Old Mutual (LSE:OML) and engineering firms Smiths Group (LSE:SMIN) and Invensys (LSE:ISYS).


The biggest blue chip faller on the day was semiconductor licensing specialist ARM Holdings (LSE:ARM, NASDAQ:ARMH) which fell 4%.


Commodities


Oil prices didn't move by much in European trading. On Wednesday, the US Energy Department said that crude inventories added 3.4 million barrels last week, while energy information provider Platts expected a gain of 1.9 million barrels. Prior to that, API reported an even bigger gain of 4.8 million barrels in US crude stockpiles.


October Brent Crude slid to US$75.95/barrel, while US light, sweet crude for October delivery inched higher to US$74.06/barrel.


Most blue chip oil and gas producers acted as a drag on the FTSE 100 today.

Supermajors BP (LSE:BP, NYSE:BP) and Shell (LSE:RDSB, NYSE:RDSB) posted small losses, while Cairn Energy (LSE:CNE) and Tullow Oil (LSE:TLW) shed 2.6% and 2.2% respectively.


BG Group (LSE:BG) outperformed its peer, climbing 1.2%.


Gold posted only a marginal loss following yesterday’s better than expected US manufacturing data and upbeat updates on Chinese manufacturing and Australia’s GDP growth.


Gold inched higher to US$1,246/oz, while silver and platinum rose to US$19.44/oz and US$1,537/oz respectively.


Major mining stocks were in decline in London. Silver miner Fresnillo (LSE:FRES) and platinum miner Lonmin (LSE:LMI) slid 1.1%, while African Barrick Gold (LSE:ABG) declined 1.8%.


Specialty chemicals firm Johnson Matthey (LON:JMAT) did better, advancing 1.8%.


Base metals prices performed better than other commodity classes. Copper and nickel climbed to US$3.46/lb and US$9.73/lb respectively , while zinc improved to US$0.97/lb.


Base metal miners didn’t move by much today in London however.. Anglo American (LSE:AAL, PINK:AAUKY)  advanced 1.3%, while  Kazkahmys (LSE:KAZ) and Vedanta Resources (LON:VED) added 1%.


Antofagasta (LSE:ANTO) moved in the opposite direction, sliding 1.1%.

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