FTSE Slumps 1.4%; Aviva Sells RAC for

Arthi Gupta
23 Jun, 2011
New York City

The UK indexes slumped after comments from the U.S. Federal Reserve Chairman Ben Bernanke. UK high street sales growth was flat in June and mortgage approvals increased in May. Irish deficit narrowed and economy expanded in the first quarter.

[R]2:45 PM London – The UK indexes slumped after comments from the U.S. Federal Reserve Chairman Ben Bernanke. UK high street sales growth was flat in June and mortgage approvals increased in May. Irish deficit narrowed and economy expanded in the first quarter.[/R]

In London, FTSE 100 Index slumped 84.60 or 1.4% to 5,688.32 and the pound edged lower to $1.5977.

UK High Street Sales Fall

The volume of high street sales was flat in June compared to a year earlier, the CBI said today.

The CBI’s latest Distributive Trades Survey, which spans the period from May 27 to June 15 showed that 33% of retailers saw sales volumes increase on a year ago, while 34% reported a fall. The balance of -2% is the first time in a year that sales have not grown and compares with +18% last month.

UK Mortgage Approvals Rise

UK mortgage approvals increased in May, data from the British Bankers'' Association showed.

The seasonally adjusted number of loans approved for home purchase increased to 30,509 in May from the upwardly revised 29,747 in April.

Irish Deficit Narrows, Economy Expands

Ireland''s current account deficit declined to €1.03 billion in the first quarter from €1.47 billion in the previous year, data released by the Central Statistics Office showed on Thursday.

Separately, the Irish economy expanded in the first quarter, after contracting in the previous quarter, data released by the Central Statistics Office showed.

The gross domestic product increased a seasonally adjusted 1.3% sequentially in the first quarter, after declining 1.4% in the fourth quarter.

Aviva Sells RAC

Aviva plc, the life insurer agreed to sell its UK-based roadside assistance service RAC Ltd. to global asset management firm Carlyle Group for £1 billion or about $1.60 billion.

Aviva said the sale is consistent with its strategy of maximizing the benefits of operating life and general insurance together under one brand.

Gainers & Losers

Caledon Resources Plc gained 1.38% to 110.50 pence after the company engaged in coal mining and exploration in Australia reached an agreement to be acquired by Guangdong Rising (Australia) Pty Ltd, known as Bidco, a unit of China-based Guangdong Rising Assets Management Co., Ltd.

The deal values the existing issued share capital of Caledon at about £313.1 million.

Chemring Group Plc plummeted 5.49% to 602.00 pence after the military equipment manufacturer reported first-half revenue increased 29% to £329.8 million from £255.9 million a year ago. Profit before tax surged 65% to £41.7 million from £25.3 million in the prior year.

Dixons Retail Plc climbed 1.15% to 16.72 pence after the consumer electronics retailers in Europe reported fiscal year 2011 revenues, including those from businesses to be closed and closed businesses fell 2.2% to £8.34 billion, from £8.53 billion generated a year earlier. Loss before tax was £224.1 million compared to prior year''s profit of £112.7 million.

Ladbrokes plc rose 0.07% to 146.60 pence after the company engaged in betting and gaming businesses said it has held highly preliminary conversations with Sportingbet Plc and added that there can be no certainty that these discussions will lead to any offer.

Rank Group Plc fell 0.13% to 150.30 pence after the gaming and betting services company said revenues for the ten weeks ended June 19 increased 7% from last year, with positive performances from UK brands.