UK Indexes Gain; Government Borrowing At Record Highs

Arthi Gupta
21 Dec, 2010
New York City

The UK index climbed after banking and mining stocks rose. The UK consumer confidence remained static in December but public sector net borrowing rose more than anticipated. BP inked five-year outsourcing services agreement with HP.

[R]3:00 PM London – The UK index climbed after banking and mining stocks rose. The UK consumer confidence remained static in December but public sector net borrowing rose more than anticipated. BP inked five-year outsourcing services agreement with HP.[/R]

In London, FTSE 100 Index gained 53.32 or 0.91% to 5,945.00 and the pound edged higher to close at $1.5560.

UK Consumer Confidence Flat, Public Sector Net Borrowing Rises

The GfK NOP indicator of UK consumer confidence was unchanged at -21 in December, the research group said.

The general economic situation over the last 12 months sub-index fell to -51 in December from -46 in November, while that over the next 12 months fell to -23 in December from
-22 in November.

The UK public sector net borrowing rose more than expected in November to a record high, according to official figures released today.

Excluding government support for the financial sector, public sector net borrowing totaled £23.3 billion, up from £17.395 billion a year ago, data released by the Office for National Statistics showed.

BP Inks Deal with HP

Hewlett-Packard Co. said its global business and technology services division HP Enterprise Services UK Ltd. inked a five-year outsourcing services agreement worth over $400 million with BP plc.

As per the deal, HP will provide BP with data center management services from monitoring, backup and recovery, site management and maintenance services, to database and middleware management.

Gainers & Losers

AstraZeneca Plc gained 0.29% to 2,946.00 pence after the biopharmaceutical company discontinued further development of motavizumab for the prophylaxis of serious respiratory syncytial virus. AstraZeneca will incur a financial impairment charge of $445 million in the fourth quarter.

BG Group Plc dropped 0.94% to 1,319.00 pence after the oil and gas company said its chief financial officer Ashley Almanza will be leaving the company on March 31, 2011. He will also resign from the company''s board. Fabio de Oliveira Barbosa will succeed Almanza.

Diploma Plc surged 4.48% to 280.00 pence after the company engaged in the supply of specialized technical products and services announced the acquisition of Carsen Medical Inc., a distributor of medical devices and related consumables and services to GI Endoscopy suites in hospitals and private clinics across Canada. The initial cash consideration to be paid for the business is C$22.5 million or £14.2 million, before acquisition costs.

Gasol plc plunged 15.05% to 0.79 pence after the African-focused gas company reported first-half loss narrowed 60% to £1.18 million or 0.11 pence per share, from £2.96 million or 0.28 pence per share last year.

Goodwin Plc declined 2.84% to 1,300.00 pence after the company engaged in mechanical and refractory engineering reported first-half sales edged higher 0.2% to £45.93 million from £45.83 million last year. Profit in the period declined 24% to £3.59 million or 49.90 pence per share from £4.71 million or 65.40 pence per share last year.

Indus Gas Limited edged lower 2.38% to 615.00 pence after the company engaged in the exploration, development and production of oil and gas reported first-half revenues of $215,000. Net loss during the period widened 29% to $2.95 million or $0.02 per share, compared to net loss of $2.29 million or $0.01 per share last year.

Tawa plc advanced 2.84% to 72.50 pence after the quoted insurance service provider and run-off investor said that it entered into a share purchase agreement to acquire 100% of the issued shares of Oslo Reinsurance Co. (UK) Ltd., from Oslo Reinsurance Co. AS, for a consideration of £4 million. The transaction is subject to approval which the company expects to obtain within three months.