UK Jobless Claims Rise; Indexes Drop

Arthi Gupta
15 Sep, 2010
New York City

The UK indexes weakened after jobless claims rose in August. The BoE Governor Mervyn King reiterated that government

[R]4:30 PM London – The UK indexes weakened after jobless claims rose in August. The BoE Governor Mervyn King reiterated that government’s commitment to lower budget deficit is necessary to sustain confidence. Next plc first-half revenue rose 5% to £1.59 billion.[/R]

In London, FTSE 100 Index traded lower 15.92 or 0.28% to 5,551.32 and the pound edged higher to close at $1.5536.

The Bank of England Governor Mervyn King told the Trades Union Congress conference in Manchester today that monetary policy is the best tool for managing the economy in the short run. In his address to TUC''s annual conference, King said it is vital for any government to set out and commit to a credible plan to reduce the soaring budget deficit.

In another report, a senior Bank of England policymaker David Miles told regional newspaper East Anglian Daily Times that inflation was more than likely to fall towards its 2% target by the end of next year, although there were considerable risks to this outlook. He stated inflation in the UK is too high for comfort and there was a great deal of uncertainty over the outlook for prices.

British jobless claims increased in August for the first time since January. The number of people claiming Jobseeker''s allowance in the UK rose 2,300 in August from a revised 1,000 in July to reach 1.47 million, the Office for National Statistics said today.

The claimant count rate was 4.5% in August, unchanged from July.

On the other hand, the number of people in employment increased 286,000 in the quarter to reach 29.16 million. The quarterly increase in total employment was mainly led by part-time workers increase by 166,000 in the quarter to reach 7.93 million, record since comparable records began in 1992.

New Delhi will stop accepting British aid from next April in view of the ""negative publicity of Indian poverty promoted by UK''s Department for International Development (DFID),"" according to a media report.

The reported move came after Foreign Secretary Nirupama Rao told the ministry last week that ""internal discussions"" within the DFID, which accounts for over 80% of all bilateral aid to India favored limiting the aid further to India and channel it to specific projects of their choice in certain states instead of routing it through the Central government.

Eros International plc said that its wholly-owned subsidiary in India, Eros International Media Ltd. set a price band of Rs 158 to Rs 175 per equity share of face value Rs 10 each in connection with EIML''s initial public offering. EIML plans to raise in aggregate Rs 3.50 billion, or about $75 million.

Gainers & Losers

AstraZeneca plc fell 1.22% to $51.84 after the drug maker said the U.S. Food and Drug Administration extended the time to complete its review for the new drug for the oral antiplatelet treatment for Acute Coronary Syndromes.

BowLeven PLC rose 1.55% to 164.00 pence after the oil and gas explorer said Wednesday it began drilling operations on the Sapele-1 exploration well on block MLHP-5, Etinde Permit, offshore Cameroon on September 14.

Brooks Macdonald Group plc gained 1.35% to 940.00 pence after the integrated wealth management company stated fiscal 2010 revenue soared 61.4% to £35.11 million, from £21.75 million in the previous year. Profit for the year surged 72% to £3.86 million or 36.31 pence per share, compared to profit of £2.25 million or 22.26 pence per share a year ago.

Galliford Try plc increased 1.87% to 299.00 pence after the home builder reported fiscal 2010 revenue decreased 16.4% to £1.22 billion from £1.46 billion in the comparable period. Profit for the year was £10.8 million or 14.7 pence per share, as against a loss of £17.8 million or 34.4 pence per share in the prior year.

Next plc surged 4.90% to 2,140.00 pence after the apparel retailer first-half revenue rose 5% to £1.59 billion, from £1.51 billion in the previous year. Profit before taxation grew 15% to £213.3 million from £185.5 million in the same period last year.

Petrel Resources plc soared 6.00% to 18.55 pence after the oil explorer reported first-half pre-tax loss narrowed 25% to €171 thousand compared to a loss of €228 thousand a year ago.

Polar Capital Holdings plc edged higher 1.57% to 97.00 pence after the investment management company said it exchanged contracts for the acquisition of fund manager HIM Capital Holdings Ltd.