UK Indexes Rise 1.6%, Home Prices Fall; Aviva, Taylor Wimpey Net Up

Arthi Gupta
03 Mar, 2011
New York City

The UK indexes rebounded after oil prices declined. The UK home prices fell and service sector growth slowed in February. Irish service sector activity improved in February. The UK government approved News Corp.''s merger with BskyB. Japan-based Itochu agreed to acquire Kwik-Fit for

[R]3:30 PM London – The UK indexes rebounded after oil prices declined. The UK home prices fell and service sector growth slowed in February. Irish service sector activity improved in February. The UK government approved News Corp.''s merger with BskyB. Japan-based Itochu agreed to acquire Kwik-Fit for £637 million.[/R]

UK stocks rebounded after Mideast worries receded and oil prices eased but hovered near recent highs. Investors set aside the worries of rising inflation and oil supplies worries and focused on recent market declines.

Inflation may prove a little more persistent next year than presently embodied in the Bank of England projections, the central bank''s Deputy Governor for Monetary Policy Charles Bean said in a speech in London on Thursday.

In London, FTSE 100 Index surged 95.61 or 1.63% to 6,010.41 and the pound edged lower to close at $1.6270.

UK Home Prices Fall

The UK home prices declined for an eighth month in February, while the demand for homes increased for the first time in eight months, according to a monthly survey conducted by Hometrack.

Home prices fell 0.2% on a monthly basis in February, following the 0.5% drop in January, property data firm Hometrack said on Thursday. This was the smallest monthly drop since July. On a yearly basis, asking prices decreased 2.7%.

The number of homes coming for sale in the market climbed 7.5%, the largest increase in three years. The survey found 25.4% growth in the number of sales agreed.

UK Service Sector Growth Slows

The UK service sector activity expanded at a modest pace in February, Markit Economics said today.

The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers'' Index for services fell more than estimated to 52.6 in February from 54.5 in January.

Irish Service Sector Activity Improves

Ireland''s Purchasing Managers'' Index for the service sector rose to 55.1 in February from 53.9 in January, results of a survey by Markit Economics and NCB Stockbrokers showed.

UK Approves News Corp and BskyB Merger

The UK government approved the acquisition proposal for British Sky Broadcasting Group plc by Rupert Murdoch''s News Corp.

Jeremy Hunt, the UK Secretary of State for Culture, Olympics, Media and Sport stated that he intends to accept undertakings from News Corp. on its proposed merger with BSkyB instead of referring the deal to the Competition Commission.

News Corp., which currently holds a 39.1% stake in BskyB, made its 700 pence per share takeover bid of BSkyB on June 15, 2010 to gain control over the remaining 61%.

Itochu Acquires Kwik-Fit

Itochu Corp., the Japanese tire company agreed to acquire UK-based tire retailer Kwik-Fit Group from European private equity firm PAI Partners for £637 million.

Itochu, together with its unit Itochu Europe Plc, would buy all the shares of the Kwik-Fit, subject to certain conditions.

Gainers & Losers

Ark Therapeutics Group plc fell 2.30% to 4.25 pence after the specialist healthcare group said that Russell Banks accepted the position of Chief Financial Officer from March 1.

Aviva Plc gained 2.25% to 459.80 pence after the insurer reported fiscal year 2010 profit, on IFRS basis, rose 34% to £1.46 billion or 49.6 pence per share compared to £1.09 billion or 37.5 pence per share a year ago. Net earned premiums rose 5.1% to £34.34 billion from £prior year''s 32.67 billion.

Balfour Beatty Plc rose 2.78% to 351.00 pence after the construction, engineering, military housing, rail and investment services company reported fiscal year 2010 group revenue climbed 3.2% to £9.24 billion from £8.95 billion in the previous year. Profit for the year declined 32.2% to £143 million or 20.9 pence per share as against £211 million or 37 pence per share in the prior year.

Cobham Plc surged 5.74% to 220.90 pence after the military and civil systems maker stated full year 2010 revenues grew 1% to £1.9 billion from £1.88 billion in the preceding year. Profit for the year declined 18% to 152.7 million pounds or 13.2 pence per share from 185.8 million pounds or 16.17 pence per share last year.

Psion Plc climbed 0.54% to 92.50 pence after the mobile computing solutions provider reported fiscal year 2010 revenues rose 2.6% to 174.5 million pounds from 170.04 million pounds in the prior year. Profit generated in the year was 2.54 million pounds or 1.81 pence per share compared to loss of 7.15 million pounds or 5.09 pence per share last year.

Shire Plc rose 2.33% to 1,759.00 pence after the specialty biopharmaceutical company said the European Commission approved FIRAZYR for self-administration after training in subcutaneous injection technique by a healthcare professional.

The European Commission approval of the FIRAZYR label change to include self-administration is valid in all of the 27 EU Member States plus Iceland, Liechtenstein and Norway.

Taylor Wimpey Plc surged 3.13% to 40.22 pence after the homebuilder reported fiscal year 2010 revenues rose 0.3% to £2.603 billion compared to £2.595 billion a year earlier. Profit for the year was £259.3 million or 7.9 pence per share compared to loss of £640.4 million or 25.1 pence per share last year.