ADR Report: Shares Up On Material Stocks; Europe Ends Down

By Victoria Finkle Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--International companies trading in New York ended mixed, as the Chinese government's pledge to make its exchange rate more flexible sparked a broad rally, although that momentum faded later in the day. The Bank of New York index of ADRs closed up 0.4% at 121.24. Material stocks, particularly those most closely tied to the world-wide economy, climbed aggressively as the Chinese government's plan alleviated fears that a tightening there would clamp down on demand. Aluminum Corp. of China Ltd. (ACH, 2600.HK, 601600.SH), saw shares rise 4% to $20.78. Shares for Australian miner BHP Billiton Ltd. (BHP, BHP.AU) closed up 2.3% at $69.41, and U.K.-based metal and mining company Rio Tinto PLC (RTP, RIO.LN) gained 2.5% to $50.71. Chinese airlines also rose on the news, with China Eastern Airlines Corp. (CEA, 0670.HK, 600115.SH) up 5.7% at $47.89, and China Southern Airlines Co. (ZNH, 1055.HK, 600029.SH) up 5.5% at $23.87. The Asian index rose 1.7% to $122.08. South Korean steel purchaser Posco (PKX, 005490.SE) said talks to buy the remaining 85% stake in Thainox Stainless PCL (INOX.TH) it doesn't already own have been temporarily halted due to political unrest in Thailand. The South Korean steel maker has been seeking to acquire the stake in Thainox after it signed a memorandum of understanding to supply hot-rolled coil to the Thai company in late 2006. Posco shares closed up 6.7% at $103.76. Tongjitang Chinese Medicines Co. (TCM), a Chinese specialty pharmaceutical company, said its first-quarter revenue increased 26% in local currency as it expanded into community hospitals, though its loss widened. Shares fell 3.6% to $3.98. The Latin American index rose 1.1% to $363.58, boosted by strength in the materials sector. Brazilian mining giant Vale SA (VALE, VALE5.BR) rose 3.2% to $27.73, and Brazilian long-rolled steel producer Gerdau SA (GGB, GGBR4.BR) edged up 1.8% to $14.42. Financial stocks in Latin America also closed mostly higher, including Chile-based banks Banco Santander-Chile (SAN, BSANTANDE.SN), up 2.7% at $70.58, and Banco de Chile (BCH, CHILE.SN), up 3.7% at $63.77. The European index slipped 0.2% to $109.03. BP PLC's (BP, BP.LN) shares fell after Anadarko Petroleum Corp. (APC) said it plans to refuse to pay its share of the clean-up costs for the Gulf of Mexico oil spill. Also weighing on the shares, BP said costs for the Gulf spill response reached $2 billion as it continues work to contain the leak and to pay claims for damages. Shares of BP fell 4.5% to $30.33. Some Irish banks still have a potentially problematic maturity mismatch between assets and liabilities, a report on the banking system published by the Central Bank of Ireland showed. Allied Irish Banks PLC (AIB, ALBK.DB) fell 6.8% to $2.74 and Bank of Ireland Sponsored ADR (IRE) fell 2.8% to $4.18. Shares in energy services companies Acergy SA (ACGY, ACY.OS) and Subsea 7 Inc. (SUB.OS) surged after the two companies announced they will merge into one entity called Subsea 7. The deal combines two companies that provide subsea construction and engineering services to the oil and gas industry. Shares of U.K.-based Acergy ended up 7.2% at $16.88. The emerging markets index climbed 1.5% to 301.36. Telkom SA Ltd. (TLKGY, TKG.JO), South Africa's dominant fixed-line phone company, is "urgently" looking to reduce its exposure to its troubled operations in Nigeria where it made the wrong bet on technology, Chief Executive Officer Reubens September said. Shares rose 1.9% to $20.10. The top government official of the Ningxia Hui Autonomous Region said he hopes a proposed coal-to-liquid joint-venture project involving Sasol Ltd. (SSL, SAP.JO) will be able to start before the end of the year and that government-designated consultants have recently started work to study the plans, which will determine whether the project gets approved. Sasol shares closed up 2.2% at $38.78. -By Victoria Finkle, Dow Jones Newswires; 212-416-3418; victoria.finkle@dowjones.com (END) Dow Jones Newswires June 21, 2010 17:26 ET (21:26 GMT)