UK Stocks Fall, HSBC Net Surges; Barclays Set Aside

Marcus Jacob
09 May, 2011
New York City

UK indexes declined tracking the losses in European markets. Commodities rebound lifted resource stocks. Gold gained 1% and silver added 4%. Centrica plunged 11% after it estimated slower earnings growth. HSBC net soared 50% and Barclays set aside

[R]4:10 PM London – UK indexes declined tracking the losses in European markets. Commodities rebound lifted resource stocks. Gold gained 1% and silver added 4% and crude oil advanced 2%. Centrica plunged 11% after it estimated slower earnings growth. HSBC net soared 50% and Barclays set aside £1 billion to cover misleading payment protection insurance sales.[/R]

UK stocks declined tracking the losses in European markets are sovereign default worries resurfaced. Commodities linked stocks advanced as gold, silver and copper rebounded. Crude oil advanced 2%.

FTSE 100 index declined 40.40 to 5,936.37 and FTSE All Share index dropped 17.88 to 3,091.75. The UK pound closed at

UK home prices fell 1.4% in April from March according to the latest survey conducted by Halifax. The survey also noted that a moderate price decline in home price trend is expected to continue however low mortgage rates and an increase in employment rate are expected to lift the average home price.

The average UK home price stood at £163,395, 4% above from a year ago but still 20% below the August 2007 peak.

Stock Movers

HSBC Plc said first quarter profit increased to $4.42 billion from $2.9 billion and earnings per share increased to 22 cents from 15 cents a year ago. The global banking giant increased first quarter dividend to 9 cents from 8 cents a year ago quarter.

Net operating income before loan impairment charged and other credit provisions declined to $17.04 billion from $17.93 billion a year ago. Loan impairment charged narrowed to $2.38 billion from $3.79 billion a year ago as global economic conditions improve and portfolio risk improved.

Barclays declined 1.3% to 273.95 pence after it set aside £1 billion to compensate clients who were sold payment protection insurance plan. The company lost an appeal to high court against tighter regulation of payment protection insurance.

Thomas Cook Group declined 5.2% to 165.40 pence after it reported first half to March sales increased 4% to £3.43 billion and net loss increased to £269.4 million from £252.2 million a year ago quarter.

The tour operator said UK business is expected to be below last year’s volume but bookings in Northern and Continental Europe are “encouraging.”

Net debt increased to £1.09 billion from £951 million in the period last year.

Centrica Plc plunged 11.2% to 304.30 pence after the energy supplier estimated slower earnings growth in 2011after UK revised taxes to 32% from 20% on UK production.

The natural gas distributor also said that average gas consumption was 19% lower in the first four months to April on warmer weather.