UK Indexes Higher; Jobless Claims Fall

Arthi Gupta
17 Nov, 2010
New York City

The UK indexes rose after jobless claims unexpectedly dropped in October. The BoE policy makers split three ways for second month. The UK pledged support for Ireland. Experian first-half net rises.

[R]3:55 PM London – The UK indexes rose after jobless claims unexpectedly dropped in October. The BoE policy makers split three ways for second month. The UK pledged support for Ireland. Experian first-half net rises.[/R]

In London, FTSE 100 Index gained 16.79 or 0.29% to 5,699.48 and the pound edged higher to close at $1.5923.

BoE Minutes

The nine-member policy board of the Bank of England split three ways for a second month in November to maintain the key interest rate and the size of quantitative easing, the minutes of the meeting showed on Wednesday.

Seven members of the Monetary Policy Committee including the Governor Mervyn King voted in favor of the proposition to maintain the bank rate at 0.5% and size of quantitative easing at £200 billion.

Adam Posen preferred to maintain the bank rate at 0.5% and increase the size of the asset purchase program by £50 billion to £250 billion. On the other hand, Andrew Sentance voted to hike the interest rate by 25 basis points and to maintain the size of QE at £200 billion.

Jobless Claims

British jobless claims unexpectedly dropped in October, while the number of employed people in the three months to September rose sharply, suggesting that the labor market conditions are improving.

The number of people claiming jobseeker''s allowance fell by 3,700 between September and October 2010 to reach 1.47 million, the Office for National Statistics said. The total number of unemployed people fell by 9,000 to 2.45 million in the three months to September.

The statistics office said the number of vacancies for the three months to October was 453,000, down 27,000 over the quarter. The sector showing the largest quarterly drop was education where the number of vacancies fell by 10,000 to 31,000.

Support to Ireland

The UK''s Chancellor of the Exchequer George Osborne on Wednesday offered Britain''s support to Ireland to stabilize Dublin''s banking system.

""It''s in Britain''s national interest that the Irish economy is successful and we have a stable banking system,"" Osborne said in Brussels as he arrived to join a meeting of European finance ministers. ""So Britain stands ready to support Ireland in the steps that it needs to take to bring about that stability,"" He added.

British banks have high exposure to the Irish banking industry.

Global Ifo Index

Global economic climate deteriorated for a second consecutive quarter, pushing down the Ifo world economic indicator to its lowest level since the fourth quarter last year.

The indicator fell to 98.6 in the fourth quarter from 103.2 in the third quarter, the Institute said. The indicator for expectations dropped to 101.8 during the fourth quarter from 112.3 in the third quarter.

Gainers & Losers

Centrica plc fell 0.99% to 330.10 pence after the utility company said that it “continued to perform strongly” in the third quarter, and now projects earnings per share for 2010 to be “in line with current market expectations and operating profit to be slightly ahead of market view.”

Experian Plc surged 6.33% to 748.00 pence after the information services firm reported first-half revenue increased over 6% to $2.001 billion from last year''s $1.874 billion. Profit in the period slipped 15.4% to $213 million or 18.8 cents per share from the prior year''s $252 million or 22.8 cents per share.

GTL Resources plc fell 2.45% to 79.50 pence after the bio-refining company reported first-half revenue grew 2% to $109.2 million from $107.2 million in the comparable period last year. Profit in the period surged 68% to $3.75 million or 11 cents per share from $2.23 million or 7 cents per share a year earlier.

ICAP plc gained 1.65% to 473.60 pence after the inter-dealer money broker stated first-half revenue climbed 9% to £867 million, from £794 million in the prior-year period. Profit for the period rose 4% to £98 million or 14.9 pence per share, compared to £94 million or 14.4 pence per share last year.

Mothercare Plc climbed 0.58% to 519.50 pence after the parenting and children''s products retailer posted first-half revenues grew 2.5% to £397.1 million from £387.3 million in the same period a year ago. Profit for the period was £0.4 million or 0.5 pence per share, compared to a loss of £4.9 million or 5.9 pence per share in the prior-year period, helped mainly by growth in international markets. Further, the company declared a 16.4% higher interim dividend.

Omega Insurance Holdings Limited dropped 0.51% to 97.25 pence after the insurance and reinsurance group reported 25% growth in gross written premium for the first 9 months of 2010 to $308.5 million.