Essar Energy adds 3 percent in mostly lower London energy sector

European equities markets were lower Tuesday on a third consecutive monthly drop in German investor confidence, higher inflation in the UK, disappointing corporate results, and an unexpected decline in new housing starts in the United States.

The Commerce Department reported that housing starts in the US were down 10.6 percent in April against an expected increase, while UK inflation was at 4.5 percent in April after being at 4 percent in March.

The FTSE 100 was down 1.06 percent in London, while the FTSE 250 dropped 0.9 percent to 11,836.

The energy sector was mostly lower, but among the three gainers in the sector Essar Energy (LSE: ESSR) was up 3.01 percent for the best performance there and on the 100, followed by a 2.81 percent gain for Heritage Oil (LSE: HOIL), while John Wood Group (LSE: WG) added 0.31 percent.

Exillon Energy (LSE: EXI) was the biggest decliner in the sector, dropping 2.36 percent.

All miners were lower, led by a 5.75 percent drop for African Barrick Gold (LSE: ABG) , turning in the worst performance on the 250 after seven people were shot and killed as part of a mob that attacked a mine in Tanzania, while other decliners in the sector included Anglo Pacific Group (LSE: APF), which was down 3.77 percent, gold miner Fresnillo (LSE: FRES) with a decline of 3.18 percent, and Eurasian Natural Resources, which was 3.01 percent lower.

The travel and leisure sector was mostly lower, with declines led by pubs operator Enterprise Inns (LSE: ETI), which was down 3.62 percent on reduced profit and sales in its fiscal first half on downsizing, while three gainers in the sector were led by Digital Entertainment (LSE: BPTY), which added 3.62 percent.

The telecommunications sector was mixed as Vodafone (LSE: VOD) added 0.86 percent after full-year earnings dropped less than expected, but Cable Wireless Communications (LSE: CWC) led declines in the sector as it dropped 3.33 percent.

Homebuilders were all lower, led by Taylor Wimpey (LSE: TW) with a decline of 3.92 percent.

Support services specialist Babcock International Group (LSE: BAB)was up 4.37 percent for the best day on the 250 after it reported a 50 percent gain in full-year revenue and after Liberum Capital Ltd recommended that its clients buy shares in Babcock.

Engineering group IMI (LSE: IMI) was down 5.97 percent as the worst performer on the 100.

Elsewhere in the region the Eurofirst 300 was down 0.9 percent to 1,128.45 while the IBEX fell 0.55 percent to 10,306.4, the CAC-40 was 1.21 percent lower to 3,941.58 and the Dax dropped 1.77 percent to 7,256.65, with only one gainer each on the CAC-40 and the Dax.

Markets in the Asia-Pacific region were mixed on more concerns about debt in Greece after European authorities meeting to consider another bailout for the debt-ridden nation said they want Greece to make more spending cuts and to sell assets before getting more financial aid, while a new report from the Federal Reserve Bank of New York showed that factory output in the region slowed growth in May as the Banks general economic index dropped from 21.7 in April to 11.9 this month.

The Nikkei 225 was up 0.09 percent to 9,567.01 in Tokyo, but the Topix index was down 0.08 percent to 828.85 and the Mothers market dropped 0.12 percent to 451.15.

Tokyo Electric Power (TYO: 9501) was another 9.5 percent lower after Moodys Japan KK cut its rating on the utilitys senior secured debt from Baa1 to Baa2, with the possibility of more downgrades, while Chubu Electric Power Co. (TYO: 9502) was down 5.5 percent and Kansai Electric Power Co (TYO: 9503) dropped 3.7 percent.

Banks were also lower after Japans finance minister said the government wants Tepco and the banks it owes money to, to work together to repair damage to Tepcos Fukushima Dai-Ichi nuclear power plant, with Sumitomo Mitsui Financial Group (TYO: 8316) down 0.8 percent while Mizuho Financial Group (TYO: 8411) was 1.6 percent lower.

Some exporters were helped by a weaker yen, with camera and copier maker Canon (TYO: 7751) up 0.3 percent and consumer electronics manufacturer Sony (TYO: 6758) adding 1.5 percent, but carmakers declined as Honda Motor (TYO: 7267) dropped 0.3 percent and Toyota Motor (TYO: 7203) retreated by 1.5 percent.

Gainers in the region aside from the Nikkei included the Shanghai Composite, which was up 0.13 percent to 2,852.77, while Australias markets were up on a statement that a strong currency was holding inflation in check for the moment, with the Sydney Ordinaries gaining 0.61 percent to 4,753 as the SP/ASX200 added 0.73 percent to 4,683.9.

South Koreas Kospi was down 0.08 percent to 2,102.41, the Hang Seng fell 0.26 percent to 22,901.1 in Hong Kong, Taiwans Taiex was 0.31 percent lower to 8,884.09 and the Sensex dropped 1.13 percent to 18,137.3 in India, while Singapores Straits Times Index was closed in observance of Vesak Day, which celebrates Gautama Buddha.

New York equities markets were lower in midday trade, with the Dow Jones Industrial Average down 0.81 percent to 12,446.9 while the SP 500 had dropped 0.36 percent to 1,324.68 and the Nasdaq Composite was 0.26 percent lower to 2,775.01.

Crude oil prices were lower at midday in New York, while at the same time metals prices were mixed with copper higher but gold and silver both lower.