UK Stocks Lower; Barclays Net Up 29%

Arthi Gupta, Mayank Mehta and Sanjay Barot
30 Apr, 2010
New York City

U.K. stocks decline as weak consumer confidence and uncertainty over the Greek bailout aid package marred investor sentiment. The pound gains against the dollar. Barclays net rises 29%. WPP raises outlook.

[R]4:00 PM London, 11:00 AM New York – U.K. stocks decline as weak consumer confidence and uncertainty over the Greek bailout aid package marred investor sentiment. The pound gains against the dollar. Barclays net rises 29%. WPP raises outlook.[/R]

The pound advanced against the dollar even as data showed U.K. consumer confidence fell to a three-month low in April.

Consumer confidence index fell to a reading of minus-16 from the March reading of minus-15, according to survey results released Friday by the GfK NOP.

The pound gained 0.3% to $1.5360 but weakened 0.4% to 86.75 pence per euro.

According to the National Institute of Economic and Social Research, the U.K. economy will “crawl” this year and expand less than previously forecast as consumer spending remains weak.

Gross domestic product is estimated to increase 1% in 2010, the London-based research group said today in a quarterly report and inflation to average 3.1% this year.

Investors remained queasy about the bailout package to Greece even as the debt-stricken country took steps to secure aid.

A multi-billion-euro aid package for Greece will be hammered out within days and will prevent the crisis from spilling over to other countries, European Commission President Jose Manuel Barroso said on Friday.

Under an agreement made earlier this month, the European Union is expected to contribute €30 billion to Greece and the IMF will provide €15 billion for this year. It is widely expected that the amount of the financial aid to the debt-stricken country would be increased to around €100 to €120 billion for a three-year period.

EU and IMF officials are negotiating with their Greek counterparts in Athens over the terms of a rescue package to stave off a default.

Barclays reported a 29% growth in its first-quarter profit, reflecting a significant reduction in impairment charges and credit market write downs amid improving market conditions.

In London FTSE 100 Index closed lower 57.55 or 1.02% to 5,560.29 and the pound edged higher to close at $1.533 and to close at €1.157.

Gainers & Losers

Barclays PLC decreased 3.7% to 347.55 pence after the financial services provider said first net profit rose 29% to £1.07 billion or 8.7 pence per diluted share compared to net profit of £826 million or 6.8 pence per share a year ago.

The Davis Service Group Plc rose 2.0% to 431.00 pence after the company said profit before tax increased modestly in first quarter.

De La Rue plc, the banknote publisher fell 0.2% to 915.00 pence.

Forth Ports PLC fell 0.1% to 1,345.00 pence.

Gulfsands Petroleum plc fell 1.1% to 319.25 pence.

Pearson plc rose 1.0% to 1,061.00 pence after the media and text book publisher said first quarter revenues rose 4.3% to £607.3 million from £634.6 million a year ago. Pre-tax profit rose 433% to £16.0 million compared to pre-tax profit of £3.0 million a year ago.

Rentokil Initial plc fell 3.0% to 128.90 pence after the pest control to parcels group said first quarter revenues dipped 4% to £607 million while profits jumped 41% to £30.4 million helped by its cost-cutting program.

Scott Wilson Group plc, after the design and engineering consultancy added 6.1% to 107.75 pence.

WPP Plc, the advertisement company advanced 1.8% to 704.50 pence.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 38 increased, 64 declined and none were unchanged.

Barclays Plc decliners in the FTSE 100 index with a loss of 6.46% followed by losses in Rio Tinto Plc of 4.42%, in Xstrata Plc of 3.84%, in Lloyds Banking Group Plc of 3.46%, and in Vedanta Resources Plc of 3.43%.

Randgold Resources Ltd. led gainers in the FTSE 100 index with a rise of 3.04% followed by increase in InterContinental Hotels Group Plc of 2.11%, in Prudential Plc of 1.76%, in Kingfisher Plc of 1.71%, and in Rexam Plc of 1.41%.