UK Stocks Rebound, Home Loans Fall; Ocado Soars

Marcus Jacob
01 Feb, 2011
New York City

UK stocks surged as manufacturing expanded at a faster pace and consumer confidence fell. The resource heavy benchmark index closed higher and oil reached 2-year high. UK Mortgage approvals declined in December and home prices edged lower in January. Ocado Group Plc reported first quarterly profit.

[R]4:00 PM London – UK stocks surged as manufacturing expanded at a faster pace and consumer confidence fell. The resource heavy benchmark index closed higher as the crude oil flirted with 2-year high prices. UK Mortgage approvals declined in December and home prices edged lower in January. Ocado Group Plc reported first quarterly profit.[/R]

The benchmark FTSE 100 index surged 1.4% or 82.08 to 5,945.02 as commodities and crude oil surge and manufacturing expanded in China, India, UK and in euro-zone. Manufacturing in the U.S. rose at the fastest pace since May 2004.

The UK pound rose 0.8% to $1.614 after the release of manufacturing index and a sharp fall in consumer confidence.

UK manufacturing index rose in January as exports and domestic demand continue to revive. The index tracked by Markit Economics increased record since 1992 to 62 in January from 58.7 in December indicating that manufacturing is still expanding at a healthy pace.

UK home prices fell in January declined 0.1% in January from December to £161,602 according to the data released by Nationwide Building Society. The prices declined 1.1% from a year ago.

In a separate report, Land Registry said yesterday that prices fell 0.2% in December.

Separately, the Bank of England data showed that mortgage approval declined to 42,563 in December from 47,287 in the previous month.

UK consumer confidence declined the most since December 1994 according to the latest data released by GfK NOP Ltd.

Manufacturing index in euro zone showed expansion and the index increased to 57.3 in January from 57.1 in December according to economic data consultancy Markit Economics.

U.S. indexes trade higher as markets in Asia and emerging economies face rising inflation. Asian markets generally gained and Chinese markets closed higher ahead of Lunar New Year holiday. UPS earnings rose 44% and BP reinstated dividend after three quarters.

Two separate manufacturing indexes in China indicated steady expansion and a private survey in India also showed the expansion for the 22nd month in a row. However, input prices rose at the fastest pace in China. Manufacturing expanded in euro zone and is expected to show an increase in the latest survey in the U.S. scheduled later in the day.

Stock Movers

BP Plc declined 1.3% in London trading after the oil giant reported fourth quarter adjusted earnings of $4.36 billion. BP also reinstated dividend of 7 cents a share for the quarter ending in December. The dividend rate is half the rate before the spill and was reinstated after three quarters.

Net income in the quarter increased to $5.6 billion from $4.3 billion a year ago on higher oil prices. For the year BP reported net loss of $3.7 billion and increased the charge related to Gulf of Mexico oil spill by $1 billion to $40.9 billion.

Ocado Group Plc soared as much as 9.2% to 237.90 pence after the UK based online grocer reported first quarterly profit. The company reported a net profit of £300,000 and for the year net loss shrank to £12.2 million compared to £25.5 million in the prior year period.

Weekly average orders increased 31% to 92,916.