UK Index Declines; Petrofac Rises, Whitbread, Stobart Fall

Devan Biswas
13 May, 2011
New York City

UK stocks traded lower tracking early weakness in the U.S. markets. The euro-zone economy expanded at a faster than expected pace in first quarter. Petrofac Ltd gained after new order won in the year rose to $2 billion. Mining companies closed higher. London Stock Exchange annual net increased 68%.

[R]5:20 PM London – UK stocks traded lower tracking early weakness in the U.S. markets. The euro-zone economy expanded at a faster than expected pace in first quarter. Petrofac Ltd gained after new order won in the year rose to $2 billion. Mining companies closed higher. London Stock Exchange annual net increased 68%.[/R]

FTSE 100 index declined 19.09 to 5,925.87 and FTSE All Share index fell 7.10 to 3,090.52.

Spain led the decliners in Europe with a loss of 1.2% followed by losses in Paris, Milan and in Frankfurt.

European markets edged higher after euro-zone gross domestic product increased in the quarter to March. Germany and France economic expansion led the region with peripheral nations still struggling.

The latest economic data showed Germany expanded at 1.5% in the latest quarter from the fourth quarter and rose 4.9% a year ago. France expanded at 1% in the quarter from the fourth quarter.

Portugal and Italy reported weaker than expected economic expansion and Spain expanded but domestic consumption was lower than expected.

U.S. stocks declined after consumer prices rose more than expected and tech stocks declined on weakness in Nvidia and Yahoo.

The index of U.S. consumer prices increased 0.4% in April from March and increased 3.2% from a year ago month. The energy index rose 2.2% and gasoline index increased 3.3% in April, according to the U.S. Labor Department.

Stock Movers

Petrofac Ltd increased 30 pence to 1,479 pence after the oil service company said it won $2 billion of orders in the year so far and total backlog increased to $12.3 billion from $11.7 billion at the end of 2010.

The company also guided comparable net income to increase 15% in the year as previously estimated.

Stobart Group Ltd declined 7.7 pence to 128 pence after the company denied a story in Daily Telegraph that alleged that financial regulators are reviewing insider transaction.

Last month Stobart entered into an option to acquire a property portfolio from WADI properties controlled by its chief executive and chief operating officer.

Catlin Group Ltd declined 0.4 pence to 394.10 pence and the Bermuda based insurance underwriter estimated rates for certain class of insurance are on the rise.

The company said net premiums earned in the quarter increased 11% to $882 million from $798 million a year ago quarter and gross premium increased 11% to $1.4 million.

The company also estimated losses linked to Japan earthquake of $200 million and to floods in Australia and earthquake in New Zealand of $175 million.

London Stock Exchange Group increased 1.1% after the operator of exchanges in London and Milan after fiscal year annual net increased 68% on strong sales from its data and technology unit and cut in operating costs.

Next PLC declined 1.8% after the retailer launched cash tender offer for its debt and plans to issue new bonds.

In trading Whitbread added more than 2% after investors speculated company to spinoff its Costa Coffee chain, Sainsbury and Aggreko gained 2% or more.