UK Construction Index Up; Imperial Tobacco Rises 5%

Marcus Jacob
02 Feb, 2011
New York City

UK stocks led the European markets as resource heavy index gained more than 0.5%. UK construction activity rebounded in January after a weather-related slowdown in December. Imperial Tobacco quarterly sales rose 5% and ICAP Plc guidance met market estimate.

[R]5:00 PM London – UK stocks led the European markets as resource heavy index gained more than 0.5%. UK construction activity rebounded in January after a weather-related slowdown in December. Imperial Tobacco quarterly sales rose 5% and ICAP Plc guidance met market estimate.[/R]

UK stocks gained as commodities rose for the third day in a row. The benchmark index led the European markets after copper, nickel and tin traded near elevated levels and analysts suggest $100 a barrel for crude oil for the next three months.

In London trading, FTSE 100 index increased 32.38 or 0.54% to 5,990.20 as commodities closed generally higher.

The pound gained against the dollar 0.6% to $1.621.

The latest data on construction industry was yet another indicator that slow but uneven economic recovery is taking hold in the U.K. Manufacturing has been recovering and home prices fell in January but consumer confidence is still low.

UK construction industry index increased to 53.7 in January from 49.1 in December according to Markit Economics Ltd and the Chartered Institute of Purchasing and Supply.

The activities declined in December on inclement weather but rebounded in January.

Stock Movers

Resource linked stocks rose for the third day in a row after nickel, tin and copper traded near elevated levels.

Max Petroleum Plc declined nearly 5% to 19.78 pence after the company said it will raise as much as $75 million to fund capital expenditure.

BHP Billiton Ltd rose 3% to 2,505 pence and the second largest miner in Australia Rio Tinto Group gained 3% to 4,473.50 pence.

Imperial Tobacco soared more than 4.5% to 1,872 pence after the quarter to December organic sales increased 5% and volume sales increased 1.2%. Imperial plans to increase dividend payout ratio to 50% on adjusted earnings basis in the current fiscal year.

Eurasia Natural Resources Corp based in Kazakhstan gained more than 2.5% to 1,061 pence after the company said in its quarterly production report that ferroalloys production increased 5.6% to 473,000 tons compared to 448,000 a year ago.

ICAP Plc declined 0.5% to 545 pence after the inter-broker dealer said that annual profit for the year ending in March will be in the range of 333 million pounds and 357 million pounds.