UK Stocks Slide 1% as Retail Sale Fall 1.4%

Arthi Gupta
16 Jun, 2011
New York City

The UK indexes edged lower on euro debt concerns and political strife in Greece. UK retail sales fell in May. Rolls-Royce secured orders worth over

[R]3:30 PM London – The UK indexes edged lower on euro debt concerns and political strife in Greece. UK retail sales fell in May. Rolls-Royce secured orders worth over £100 million to supply propulsion systems. Mulberry Group soared 10.5% after fiscal year 2011 revenue surged 69% to £121.64 million.[/R]

Stocks in London trading declined after UK retail sales fell and weakness persisted for the second day in a row in the European markets.

Talks of Greek contagion intensified as banks fell on the worries that more than $90 billion may be at risk for banks in Europe and the U.S.

The Greece’s Prime Minister George Papandreou is facing a revolt from his own party and opposition lawmakers to pass austerity measures. The prime minister reshuffled his cabinet and will seek a fresh a confidence vote in parliament.

The new austerity measures of €28 billion or $40.5 billion and asset sale of more than $30 billion are required for the bailout package of as much as $100 billion European Union and the International Monetary Fund.

Greece descended into chaos as prime minister offered to resign to unite the nation and students and labor unions rioted on the streets of Athens. Prime Minister George Papandreou in a televised address last night to the nation said he will form a new government and call a vote of confidence in parliament.

In London, FTSE 100 Index declined 59.57 or 1.04% to 5,761.68 and the pound edged lower to $1.6093.

UK Retail Sales Fall

UK retail sales, including automotive fuel, fell 1.4% on a monthly basis in May, data from the Office for National Statistics showed. In April, sales grew 1.6% on a monthly basis, revised up from 1.1% growth reported earlier.

On a yearly basis, all retailing including automotive fuel grew at a pace of 0.2% in April. Excluding automotive fuel, retail sales dropped 1.6% on a monthly basis in May.

Rolls-Royce Secures Orders

Rolls-Royce announced orders worth over £100 million to supply propulsion systems for offshore construction and drilling vessels. The ships would be built at shipyards in Asia for a range of ship owners including Sea Drill, Pacific Drilling, Noble, Ocean Rig and Pride, the company added.

Gainers & Losers

Ashtead Group Plc plunged 9.9% to 160.30 pence after the industrial equipment rental company reported fourth quarter revenue increased 16% to £242.8 million from £210.1 million in the prior-year quarter. The company reported a pre-tax loss of £19.9 million for the quarter compared to a profit of £1.9 million last year.

Cairn Energy Plc fell 1.78% to 403.60 pence after the oil and gas company said its Chief Executive Officer Bill Gammell will step down from July 1, but will take over as non-executive Chairman, succeeding Norman Murray.

However, Gammell will continue as Chairman of Cairn India and will retain overall responsibility for the current Vedanta transaction.

Mulberry Group plc surged 10.5% to 1,479 pence after the British luxury fashion brand reported fiscal year 2011 revenue surged 69% to £121.64 million from £72.05 million in the previous year.

For the year, the company''s pre-tax profit soared 358% to £23.35 million compared with £5.1 million last year.

Premier Farnell Plc declined 8.30% to 251.80 pence after the supplier of electronic, electrical and industrial products reported first quarter revenues improved 6% to £252.5 million from £244.9 million in the previous year.

Profit before tax for the quarter surged 89% to £41.9 million from £22.2 million reported in the previous year.

WS Atkins Plc decreased 3.29% to 778.50 pence after the engineering consultancy and support services group reported fiscal year 2011 revenue grew 12.7% to £1.56 billion from £1.39 billion in the quarter a year ago.

Pre-tax profit for the year fell 5.8% to £91 million from £96.6 million last year.