UK Construction Sector Contracts; HMV Group Plunges 22%

Arthi Gupta
05 Jan, 2011
New York City

The UK indexes slid after mining and banks stocks fell. Construction sector contracted in December. Retailers reeled under the impact of value-added tax. Irish home prices fell in the fourth quarter and services PMI dropped in December. HMV plunges on decline of sales.

[R]4:00 PM London – The UK indexes slid after mining and banks stocks fell. Construction sector contracted in December. Retailers reeled under the impact of value-added tax. Irish home prices fell in the fourth quarter and services PMI dropped in December. HMV plunges on decline of sales.[/R]

The UK''s coalition government has come under strong criticism from the Labor Party for justifying the hike in the VAT rate to 20% as a ""progressive"" policy. Chancellor George Osborne defended the rise as a necessity to bring down Britain''s large budget deficit. Many Britons fear that increase taxes are not justified and the government should look at various wasteful government expenses including military.

The government estimates the increase in the VAT to bring an extra £13 billion in the financial year starting April 1.

In London, FTSE 100 Index gained 9.13 or 0.15% to 6,022.25 and the pound edged lower to close at $1.5579.

UK Construction Sector Contracts

UK construction sector contracted in December, mainly under the impact of poor weather conditions, a survey by Markit Economics showed today.

The seasonally adjusted Markit/Chartered Institute of Purchasing & Supply construction Purchasing Managers'' Index fell to 49.1 in December from 51.8 in November.

Irish Home Prices, Services PMI Fall

Irish home prices declined in the fourth quarter at the fastest pace since the last quarter of 2009, property Web site Daft.ie said today.

Asking prices for residential property fell 4.8% in the fourth quarter of 2010, which took overall drop in the year to 14%. By the end of 2010, the national average asking home price had fallen 40% from the peak in 2007 and stayed at just below €220,000.

Irish service sector activity declined at the fastest pace in 11 months in December as poor weather conditions hit businesses, new survey data showed on Wednesday.

The Markit-NCB services purchasing managers'' index fell to a seasonally adjusted 47.4 in December from 50.8 in November.

Gainers & Losers

CRH plc slumped 4.48% to $202.4 after the diversified building material company said it has undertaken development initiatives for the second half of 2010 totaling €370 million, higher than the €170 million in the prior-year period.

Domino''s Pizza UK & IRL Plc dropped 0.18% to 555.00 pence after the pizza delivery reported double-digit growth in system sales and like-for-like sales for the fourth quarter.

In a trading update for the 13 weeks ended December 26, 2010, the company said system sales increased 17.8% to £132.5 million from £112.4 million reported in 2009. Like-for-like sales in 553 mature stores grew 10.3%, compared to an 8.6% growth in 501 mature stores in the previous year.

HMV Group plc plunged 21.54% to 25.50 pence after the global entertainment retail chain said like-for-like sales for the five weeks ended January 1 declined 12.9% and total sales dropped 11.7%.

Next Plc gained 1.99% to 2,055.00 pence after the retailer estimates pre-tax profit will be in the range of £540 million to £555 million for the fiscal year ending this month. This outlook represents an increase of 7% to 10% from the previous year.

Petrofac Ltd. rose 1.23% to 1,642.00 pence after the oil & gas facilities service provider announced the appointment of Andy Inglis as the Chief Executive of its Energy Developments and Production Solutions units.

Sinclair (William) Holdings Plc surged 6.12% to 151.75 pence after the commercial horticulture and branded garden products producer reported for fiscal year 2010 revenues grew 4.7% to £48.46 million from £46.28 million last year. Profit for the year increased 43.3% to £1.62 million or 9.7 pence per share from £1.13 million or 6.8 pence per share in the prior year.