UK Indexes Surge 2.2%; Manufacturing Index Rises

Arthi Gupta
01 Dec, 2010
New York City

UK indexes closed higher after commodities rose after China reported manufacturing expansion. Home prices fell in November. Rolls-Royce won $420 million order from Hawaiian Airlines. Thomas Cook plunged after it reported sales decline of 4% and annual net loss.

[R]4:00 PM London – UK indexes closed higher after commodities rose after China reported manufacturing expansion. Home prices fell in November. Rolls-Royce won $420 million order from Hawaiian Airlines. Thomas Cook plunged after it reported sales decline of 4% and annual net loss.[/R]

UK stocks closed higher and resource companies led the gainers. Commodities gained after China reported faster manufacturing expansion and European indexes rebounded after Portugal completed the sale of Treasury bills.

The closely watched Portuguese debt auction drew more than two times bids and was completed at an average yield of 5.28%, higher than 4.8% yield a month ago.

In London, FTSE 100 Index surged 119.00 or 2.16% to 5,647.21 and the pound edged higher to close at $1.5581.

China''s manufacturing purchasing managers’ index rose to a seven-month high of 55.2 in November, from 54.7 in October, the China Federation of Logistics and Purchasing said on Wednesday, with strong growth in new orders and production.

UK Home Prices Decline; Manufacturing PMI Surges

UK home prices fell 0.3% on a monthly basis in November, compared to the 0.7% decrease in October, according to the Nationwide Building Society.

Home prices increased 0.4% annually in November to £163,398. In October, it had showed an annual growth of 1.4%.

UK purchasing managers'' index rose to 58 in November, the highest level since September 1994, from a revised 55.4 in October, according to survey data released by Markit Economics, the Chartered Institute of Purchasing & Supply.

Manufacturing employment rose at the quickest pace since the survey began in 1992.

Irish Manufacturing Activity Rises

According to a report from the Markit Economics released today, Irish manufacturing sector expanded in November led by strong growth in new export orders.

The seasonally adjusted NCB manufacturing purchasing managers'' index rose to 51.2 in November from 50.9 in October.

RBS Sells Global Merchant Services Business

Royal Bank of Scotland Group plc completed the sale of its Global Merchant Services business to a consortium of Advent International and Bain Capital, following the approval of the European Commission, U.S. anti-trust authorities and other regulators.

The bank retained 19.99% in the newly named business WorldPay.

Rolls-Royce Wins Order from Hawaiian Airlines

Rolls-Royce Group Plc said it will provide Trent 700 engines for Hawaiian Airlines Airbus A330 six aircraft in a contract worth $420 million at list prices. The order includes a TotalCare long-term services agreement.

Gainers & Losers

Avanti Communications Group plc rose 0.48% to 729.00 pence after the broadband satellite operator reported fiscal year 2010 revenues dropped 28% to £5.82 million from £8.04 million in the previous year. Loss in the period was £1.93 million or 3.68 pence per share compared to a profit of £1.05 million or 3.39 pence per share last year.

May Gurney Integrated Services Plc surged 8.55% to 235.00 pence after the infrastructure support services company reported first-half revenues grew 21% to £288.9 million from £239.1 million in the same period a year ago. Profit for the period increased 30% to £7.9 million or 11.55 pence per share, from £6.1 million or 9.02 pence per share in the prior year.

Ryanair Holdings plc gained 2.49% to €3.95 after the low-cost airline announced three new bases on the Canary Islands in summer 2011. Ryanair will base six aircraft across Gran Canaria, Lanzarote and Tenerife from February 2011 while also increasing Fuerteventura routes and frequencies.

Sage Group Plc soared 5.40% to 271.20 pence after the business management software provider reported fiscal year 2010 revenue edged lower 0.3% to £1.435 billion compared with £1.439 billion a year earlier. Profit for the year rose 20% to £227.3 million or 17.23 pence per share, compared to profit of £189.5 million or 14.42 pence per share in the prior-year period.

Telford Homes Plc fell 0.62% to 79.50 pence after the residential property developer said first-half revenue declined 32% to £58.2 million versus £85.9 million in the comparable period. Profit in the period plunged 61% to £1.58 million or 3.3 pence per share, from £4.10 million or 10.5 pence per share in the year earlier period.

Thomas Cook Group plc slumped 4.51% to 177.90 pence after the European tour operator reported fiscal year 2010 revenue slipped 4% to £8.89 billion from £9.27 billion a year ago, reflecting planned capacity reductions in the winter 2009/1 and lost sales due to the volcanic ash cloud incident.

The company reported a loss for the full-year period of £2.6 million or 0.3 pence per share, compared to a profit of £7 million or 0.8 pence per share last year.

The company also said that challenges experienced in the UK and an uncertain outlook caused it to undertake a restructuring, which includes elimination of 500 positions.

Vedanta Resources Plc gained 3.07% to 2,047.00 pence after the diversified metals and mining companies said its subsidiary Sesa Goa Ltd. announced that its third party mining contract for Thakurani Mine in Barbil, Orissa expired on November 30.