FTSE Declines; BP Recovers Gulf Oil

Arthi Gupta, Mayank Mehta and Sanjay Barot
04 Jun, 2010
New York City

UK indexes fall on U.S. jobs data and comments from Hungarian officials. UK house prices drop 0.4% month-on-month in May. easyJet unveils ash detector to end large-scale disruption.

[R]4:00 PM London – UK indexes fall on U.S. jobs data and comments from Hungarian officials. UK house prices drop 0.4% month-on-month in May. easyJet unveils ash detector to end large-scale disruption.[/R]

Stocks in the UK pared early gains after Hungarian officials said the country''s budget was in ""much worse"" condition than the previous government had stated, raising new fears about sovereign debt burdens in Europe.

BP Plc succeeds in putting cap on oil gusher in Gulf of Mexico. Hornby Plc quarterly profit declines 12%.

In London FTSE 100 Index traded lower 80.36 or 1.54% to 5,130.82 and the pound edged lower to close at $1.457 and edged higher to close at €1.208.

Hungary''s fiscal situation is grave because the previous government “manipulated” figures and “lied” about the state of the economy, said Peter Szijjarto, spokesman for Prime Minister Viktor Orban. Earlier, in October 2008, Hungary secured a €20 billion or $24 billion loan from the IMF, the European Union and the World Bank to avoid recession.

UK house prices dipped for the second month in a row in May. House prices declined 0.4% month-on-month in May, following a 0.1% fall in April, a survey by Lloyds Banking Group Plc''s Halifax division said today.

The average house price totaled £167,570 in April, which was 16% below its August 2007 peak.

BP Plc finally managed to place a cap over the ruptured oil well in the Gulf of Mexico as part of efforts to siphon off some of the oil to drill ships berthed on the ocean surface. The company said the new system will take out 90% of oil spill but relief wells are still needed to stop the leak that may take as long as August.

According to the U.S. Coast Guard, which has been monitoring BP''s efforts, placing the cap was a positive development, but that it would be ""some time before we can confirm that this method will work and to what extent it will mitigate the release of oil into the environment.""

BP said it would require careful analysis of readings to ascertain whether the cap was indeed working since the outflow of gas and oil from the ruptured well was uneven.

The Obama Administration sent a preliminary bill for $69.09 million to BP Plc and other responsible parties for recovery operations being undertaken in the Gulf of Mexico in response to the Deepwater Horizon Oil Spill off the Louisiana coast.

Gainers & Losers

Cluff Gold plc, the gold mining company rose 5.1% to 71.00 pence.

easyJet plc rose 1.0% to 428.70 pence. The airline carrier today unveils a ground breaking technology that will minimize future disruption from volcanic activity. easyJet will be the world’s first airline to trial a new technology called Airborne Volcanic Object Identifier and Detector.

Hornby Plc rose 5.4% to 135.00 pence after the holding company said fiscal year 2010 revenues rose 5% to £64.7 million from £61.6 million a year ago. Net profit for the year fell 12% to £3.7 million or 9.60 pence per diluted share compared to net profit of £4.2 million or 10.98 pence per share a year ago.

Laura Ashley Holdings plc, the fashion and homewares retailer rose 5.4% to 14.50 pence.

London Stock Exchange Group Plc, the alternative stock trading market fell 0.1% to 641.00 pence.

Low & Bonar plc, the materials firm surged 13.7% to 33.00 pence.

Rockhopper Exploration Plc, the oil and gas exploration company surged 33.3% to 320.00 pence.

SThree plc, the recruitment group rose 2.3% to 310.00 pence.