The latest Halifax house prices survey showed that the UK property market was beginning to cool. House prices in April gained at their slowest pace this year and seemed to suggest that recent rate hikes are taking effect.

Advancers

Reports suggested that KKR, the private equity group, was mulling a bid for Hammerson, the UK property company, which is valued at about 4.5 billion pounds. Shares of Hammerson moved 7.4% higher.

The talk supported the rest of the sector - British Land gained 3% while Land Securities was up 3%.

Venture capital company 3i advanced 2.4% after it reports of strong full-year numbers, rasing realised profits on investments to 830 million pounds from 579 million pounds. Bid talk also boosted Yell Group, the directories company, up 2.2%.

Among the mid-caps, Babcock International gained 8.3% on news of its 350 million pounds purchase of the Devonport naval dockyard. Premier Foods rose 5.8% after a reassuring trading update.

Decliners

Mining stocks eased as the takeover speculation that sent the sector sharply higher in the previous session subsided. Rio Tinto fell 1.9% and BHP Billiton fell 2.5%.


[R]9:00AM U.S. stock futures traded lower on weak retail sales and wider trade deficit.[/R]
U.S. stock futures traded lower Thursday, as investors digested disappointing April retail sales and bigger-than-expected increases in the trade deficit and import prices. The Commerce Department said that U.S trade deficit for March widened by 10.4% to $63.9 billion, compared with expectations of a deficit of $59.6 billion. Import prices rose 1.3% in April driven by sharply higher petroleum prices, topping the average economist estimate of a 0.9% increase. In another economic report, the Labor Department said that initial jobless claims fell by 9,000 to 297,000 last week.

Retailers disappointed with much weaker-than-anticipated April same-store sales, although the declines were largely expected because of the robust sales in March, helped by an early Easter. The list of companies missing expectations include Wal-Mart Stores, (WMT: chart), Federated (FD: chart), Gap (GPS: chart), AnnTaylor Stores (ANN: chart), Nordstrom (JWN: chart), Pacific Sunwear (PSUN: chart), New York & Co. (NWY: chart), Limited Brands (LTD: chart), Abercrombie & Fitch (ANF: chart) and others. Costco Wholesale (COST: chart) was one of the very few retailers posting better-than-expected sales.

Among companies releasing quarterly earnings, Whole Foods Market Inc. (WFMI: chart) plunged 12% in pre-market trading after the natural and organic foods grocery retailer missed Q1profit expectations. The company said that quarterly earnings fell 11.2%, and that federal regulators raised antitrust concerns about its proposed purchase of smaller rival Wild Oats Markets Inc. (OATS: chart). Urban Outfitters (URBN: chart) said Q1 net income rose to 17 cents a share, up from 12 cents a share, with sales rising 16% to $314.5 million. Quarterly results came in line with expectations.

Viacom (VIA: chart) reported 36% earnings drop in Q1, pressured by higher marketing expenses for movies and a restructuring charge at MTV. The media company posted earnings of 29 cents a share, down from 43 cents a share a year earlier. Revenues grew 16% to $2.75 billion. S&P 500 futures dropped 3.80 points to 1,511.80 and Nasdaq 100 futures slid 6.00 points to 1,906.25. Dow industrial futures slumped 33 points to 13,351.


[R]8:30AM Asian markets finish broadly higher Thursday, Japan, HK decline.[/R]
Asian markets ended broadly higher on Thursday. The 225-issue Nikkei in Tokyo closed 0.1% lower at 17,736.96. Toyota dipped1.9% after the company reported weak earnings growth Wednesday, hurt by higher raw-material costs and softer demand in the U.S. Mitsui Fudosan bucked the downtrend and gained 3.2%, as the compny forecast operating income of 220 billion yen for the year ending March 2010, a rise of 36% from the past business year.

Hong Kong Hang Seng Index closed 0.5% lower at 20,746.2. Hong Kong Exchanges & Clearing rose 1.7%, keeping the uptrend from the previous session, after the operator of the city stock and derivatives exchanges posted higher first-quarter net profit growth mid-session Wednesday. South Korean Kospi index reached a record 1,611.03, then retreated to 1,599.68, notching a 0.4% advance. Hyundai Heavy Industries advanced 3.9% to a record high tracking a brokerage upgrade from Citigroup.

Chinese Shanghai Composite Index set an intraday record of 4,054.75, before easing to 4049.70, for a gain of 0.9% on the day. The index closed at a record high for the fourth consecutive session, as more retail investors appeared into the market expecting to profit from its strongl run. On Wednesday, Chinese stock markets recorded greater than the rest of Asia combined value of shares, including Japan.

In terms of turnover, China is now the second-largest market in the world but in terms of market capitalization it is less than half the size of Japan. The two major indices, Shenzhen and Shanghai have a combined market capitalization of $2,200 billion compared to Japan’s $4,700 billion, the UK almost $4,000 billion and the $16,500 billion of the U.S.

China Petroleum & Chemical added 5.5% after gaining 1.3% Wednesday, Baoshan Iron & Steel rose 6% following a 4.7% gain in the previous session and China Yangtze Power advanced 2.7% after adding 2.9% Wednesday.

Australian S&P/ASX 200 closed up 0.2% to 6,355.50 on gains in banking shares. Rio Tinto fended down 2.8% as hopes for an imminent takeover bid from larger rival BHP Billiton subsided. Shares of BHP Billiton dropped 0.3%. New Zealand NZSX-50 also set a new record, adding 0.4% and Indonesian JSX Composite edged 0.1% higher to 2,040.26.