FTSE Surged 1.8%; BoE Held Key Rate and Bond Program

Arthi Gupta
04 Nov, 2010
New York City

The UK indexes surged after the BoE retained key rate at 0.5% and bond purchase program at

[R]4:00 PM London – The UK indexes surged after the BoE retained key rate at 0.5% and bond purchase program at £200 billion. The UK home prices rose more than expected but auto registrations fell in October. Irish service sector rebounded in the month. Unilever net soared 21% on improved performance in emerging markets.[/R]

The U.S. Federal Reserve said it would buy $600 billion in Treasuries in a phased manner, to help recover the sagging economy.

In London, FTSE 100 Index soared 105.77 or 1.84% to 5,854.74 and the pound edged higher to close at $1.6263.

The Bank of England on Thursday maintained the size of the quantitative easing at £200 billion and left its key interest rate unchanged at a record low again.

At the end of two-day rate setting meeting, the Monetary Policy Committee decided to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The minutes of the meeting will be released on November 17.

The UK home prices increased more than expected in October after declining sharply in September.

Home prices rose 1.8% in October, following a 3.7% fall in September, according to a report from Lloyds Banking Group Plc''s Halifax division. Prices advanced 1.2% on an annual basis as measured by the average for the latest three months against the same period a year earlier.

The UK car registrations declined 22.2% in October to 131,495 units, the Society of Motor Manufacturers and Traders stated today.

Auto sales in the first ten months of the year increased 4.8% to 1,767,154 units. Diesel car registrations increased 3.8% as market share climbed to a record 54.7%, 13.7 percentage points higher than a year ago.

Irish service sector rebounded in October after a slight deterioration in September, the Markit Economics said today. The NCB services purchasing managers'' index rose to a seasonally adjusted 50.9 in October from 48.8 in September.

Gainers & Losers

Amdocs Limited gained 0.43% to $30.55 after the software and service provider said fourth quarter revenues rose 8% to $762.19 million, from $707.42 million in the prior-year quarter. Net income in the quarter increased 10.4% to $94.7 million or 48 cents per diluted share, compared to net income of $85.8 million, or 42 cents per share in the prior year''s fourth quarter.

Invensys PLC surged 5.37% to 302.30 pence after the engineering and information technology services provider reported first-half revenues gained 9% to £1.16 billion, from £1.07 billion in the same period a year ago, driven by order book conversion. Net profit in the period declined 25% to £58 million or 7.1 pence per share, from £77 million or 9.5 pence per share last year.

JD Wetherspoon plc fell 1.33% to 409.50 pence after the pub chain operator said its first quarter like-for-like sales rose 1.6% and total sales grew 7.3%.

Man Group plc soared 11.79% to 283.60 pence after the asset manager reported first-half revenue fell 6% to $651 million, compared to last year''s revenue of $692 million. Net profit in the period plunged 56% to $109 million or 5.7 cents per share, compared with net profit of $248 million or 13.8 cents per share in the previous year.

RSA Insurance Group plc gained 0.15% to 133.30 pence after the general insurance company reported a 10% rise in third quarter net written premiums to £5.53 billion from £5.03 billion a year ago. International premiums were up 8% to £2.65 billion from £2.46 billion in the previous year.

Total UK premiums improved to £2.18 billion from £1.98 billion a year earlier and emerging markets'' premiums rose to £683 million from £575 million last year.

Tate & Lyle plc surged 7.81% to 528.50 pence after the food and industrial ingredients maker reported first-half revenues rose 4% to £1.35 billion, from £1.29 billion a year earlier. Net profit in the period surged 59% to £70 million or 20.9 pence per share, from £44 million or 9.7 pence per share a year ago.

Unilever plc soared 5.19% to 1,904.00 after the Anglo-Dutch consumer products maker reported third quarter turnover rose 13.2% to €11.55 billion from €10.2 billion in the year-ago quarter. Net profit in the quarter increased 19% to €1.25 billion or 0.43 euro per share from €1.05 billion or 0.36 euro per share in the prior year quarter.