UK GDP Expands 0.5%; GlaxoSmithKline, BP Profit Rises

Arthi Gupta
27 Apr, 2011
New York City

The UK indexes advanced after service index rose 1.5% in February, GDP expanded 0.5% in the first quarter, and mortgage approvals climbed in March. BP, Fenner and GlaxoSmithKline reported strong earnings.

[R]3:45 PM London – The UK indexes advanced after service index rose 1.5% in February, GDP expanded 0.5% in the first quarter, and mortgage approvals climbed in March. BP, Fenner and GlaxoSmithKline reported strong earnings.[/R]

In London, FTSE 100 Index declined 0.31 or 0.01% to 6,069.05 and the pound edged higher to close at $1.6556.

UK Service Index Rises

UK service sector index increased 1.5% in February from a year-ago month. Between January and February output from the service sector rose 0.6%. The largest contribution to the increase was 1.5% in the business services and finance.

UK GDP Expands, Employment Climbs

UK GDP rose 0.5% in the first quarter compared to a decrease of 0.5% in the previous quarter. Construction output fell 4.7% and total production output rose 0.4%.

GDP in first quarter returned to the level in the third quarter of 2010. In the three quarters total employment rose 0.8% or 383,000.

UK Mortgage Approvals Up

The seasonally adjusted number of loans approved for home purchase in the UK grew to 31,660 in March from an upwardly revised February figure of 30,178. The original number for February was 29,923.

Loan approvals for home purchase rose for a third consecutive month in March and increased to the most in eight months, data released by the British Bankers'' Association showed today.

Net mortgage lending rose 2.3% annually in March, substantially ahead of the 0.7% for the whole mortgage market in February, the BBA said.

Gainers & Losers

ARM Holdings Plc fell 1.44% to 616.50 pence after the semiconductor firm reported first quarter revenue grew 26% to £116.02 million from £92.35 million in the same quarter last year. Profit for the period, on an IFRS basis, rose 10% to £21.54 million or 1.57 pence per share compared to £19.57 million or 1.47 pence per share in the previous year.

Barclays Plc plunged 4.59% to 288.00 pence after the banking firm reported first quarter pre-tax profit declined 9% to £1.66 billion from £1.82 billion in the prior-year quarter, as its investment bank Barclays Capital suffered a hefty credit loss and lower top-line income.

BP Plc fell 0.47% to $46.10 after the oil and gas explorer said first quarter total revenues and other income increased 18.7% to $88.31 billion from last year''s $74.42 million. Profit in the quarter grew 17% to $7.12 billion or 37.42 cents per share from $6.08 billion or 31.99 cents per share in the previous year, as the company sold assets to make up for the loss incurred by the Gulf of Mexico oil spill.

Fenner plc dropped 1.96% to 364.70 pence after the manufacturer of industrial belting and other polymer-based products said first-half revenue rose 35% to £332.5 million versus £246.3 million in the prior year. Profit in the period surged 109.5% to £17.6 million or 9.1 pence per share versus £8.4 million or 4.8 pence per share in the previous year.

GlaxoSmithKline Plc gained 1.55% to 1,280.00 pence after the drug major reported first quarter turnover fell 10% to £6.59 billion from £7.36 billion in the previous year. Profit in the quarter increased 14% to £1.53 billion or 29.6 pence per share from £1.34 billion or 26.1 pence per share a year ago, mainly on the asset disposal gains.