UK Index Decline 1.1%; BSkyB Acquisition in Limbo

Arthi Gupta
08 Jul, 2011
New York City

The UK indexes declined after producer prices rose 5.7% in June, driven by higher petroleum and food prices. News Corp may face a delay in the acquisition of British Sky Broadcasting after an outrage on its long practised journalism ethics at the largest selling tabloid.

[R]4:30 PM London – The UK indexes gained after producer prices rose 5.7% in June, driven by higher petroleum and food prices. News Corp may face delay in the acquisition of British Sky Broadcasting after an outrage on its long practised journalism ethics at the largest selling tabloid.[/R]

Andy Coulson, former editor of the UK tabloid with the largest circulation The News of the World and British Prime Minister David Cameron's former communications head, has been arrested over allegations of phone hacking scandal.

News Corp. was forced to shut down the News of the World tabloid after this weekend edition in the wake of its alleged involvement in a phone-hacking scandal that showed a wide ranging unethical news gathering practices and improper payments to police that many view as bribery.

Rupert Murdoch controlled news gathering apparatus has long been perceived to influence the UK political system and has been viewed at times to dictate certain policy steps.

Rupert Murdoch controlled cable news channel Fox News in the U.S. has also been under fire for its slanting of the news and presenting its political views as news.

News Corp may face delay or may have to forego its acquisition of British Sky Broadcasting after the latest public outcry and parliamentary and police inquiries to investigate its news gathering and reporting practices at the tabloid.

In London, FTSE 100 Index declined 1.1% to 5,990.58 and the pound edged lower to $1.5945. For the week, the FTSE 100 Index closed flat.

UK Producer Prices Up

UK output price inflation rose 5.7% in June from the previous year as against the 5.4% increase in May, driven by higher petroleum and food prices, according to data published by the Office for National Statistics today.

Excluding food, beverages, tobacco and petroleum prices, annual core output price inflation slowed to 3.2% in June from 3.4% in May.

On a monthly comparison, overall output prices edged higher 0.1% compared to 0.2% rise in May.

Gainers & Losers

Flybe Group PLC rose 1.04% to 194 pence after the airline reported the sale of three Bombardier Q400 aircraft to Rand Merchant Bank of Johannesburg, South Africa, which will lease them to South African Express.

Grafton Group plc plunged 9% to €3.04 after the independent, profit growth oriented company reported first-half group turnover of about €997 million compared with €979 million in the first-half of 2010.

Moneysupermarket.com Group plc gained 1% to 109.20 pence after the price comparison Web site owner estimated second quarter revenues to be in the region of £88.3 million.

SIG Plc fell 2.48% to 141.60 pence after the supplier of insulation, interiors, exteriors and specialist construction products reported first-half total revenues increased 9% to £1.40 billion from £1.28 billion in the prior year.

Synchronica plc surged 9.3% to 18.85 pence after the mobile messaging company issued an update on the proposed acquisition of Nokia's Operator Branded Messaging business.