UK Indexes Rise on Resource Stocks; Xstrata, Cairn, Yell Up

Marcus Jacob
07 Feb, 2011
New York City

The UK benchmark index increased 0.9% tracking the gains in commodities and world market sentiment. Cairn Energy Plc said it is likely to complete the sale of its India unit as early as end of March. Randgold Resources net surges.

[R]4:00 PM London – The UK benchmark index increased 0.9% tracking the gains in commodities and world market sentiment. Cairn Energy Plc said it is likely to complete the sale of its India unit as early as end of March. Randgold Resources net surges.[/R]

Stocks in Europe and UK continued to advance following nearly 2% increase in the region after manufacturing advanced in the region. Commodities heavy UK benchmark index rose today following the increase in copper and precious metal price in London.

FTSE 100 index increased 0.9% to 6,051.62 and FTSE All Share index also gained as much as 0.8%.

A private research report published by BDO showed that high street sales in January rose 9.1% from a year ago and eased the worries that increase in VAT will curtail sales.

Cairn Energy Plc said it expects to complete the sale of its India unit in the next two months. Indian government is in discussion to approve the sale to London listed Vedanta Resources with mining operation in India.

Randgold Resources gained more than 1.5% after the West Africa based miner said annual profit in 2010 increased 49% to $103.5 million and forecasted production increase of 80% this year. Sales in the year increased to $487.7 million.

Banco Santander Commences Tender Offer for a Polish Bank

Spain based Banco Santander agreed to acquire Poland based Bank Zachodni for a 16.6 billion zloty or $5.8 billion.

According to the news distributed by Polish newswire PAP, Santander offered 226.89 zloty a share. Allied Irish, Ireland government controlled bank, is divesting its 70% stake in the bank after the collapse of real estate bubble.

The tender offer will start on March 25 and end on April 1

The deal was first announced in September will give the Irish bank 3.1 billion euros and also includes its stake in the asset management unit.

Nokia traded higher after the company was reported in German media to prepare for management shakeup as early as this Friday.

Newly appointed Stephen Elop, Microsoft veteran is expected to not only focus on group executive board that includes 10 executives and also to management. Nokia’s mobile handset unit and markets unit are expected to see new leaders.

Stock Movers

Rexam Plc gained 2.2% to 364 pence on the speculation that the company is seeking to sell its beverage can container lead making unit for more than 200 million pounds. The Mail on Sunday reported the speculation.

Yell Group Plc gained 5% to 10.45 pence on a report in Financial Times that the company agreed to cut more costs and increase investment in digital business.

Xstrata Plc rose more than 3% to 1,640 pence after an analyst at Citigroup lifted price target to 2,011 pence.

Of the FTSE 100 index stocks, ARM Holdings added 3.2%, Essar Energy gained 2.6% and Experian added 1.9%.

Old Mutual led the decliners in the index with a loss of 2.2% followed by losses in Investec of 1.9% and Vodafone Group of 0.9%.