UK Indexes 1% Lower; Parliament Demands Murdoch Testimony

Arthi Gupta
14 Jul, 2011
New York City

The UK indexes traded lower on global economic concerns. The Irish Finance Minister Michael Noonan said that Ireland has successfully met the targets set out by the EU and the IMF. Irish annual inflation remained steady in June.

[R]5:30 PM London – The UK indexes traded lower on global economic concerns. The Irish Finance Minister Michael Noonan said that Ireland has successfully met the targets set out by the EU and the IMF. Irish annual inflation remained steady in June.[/R]

UK indexes tracked lower on global concerns and rising tensions in the debt talks in the U.S. News Corp faces more inquiries after Rupert Murdoch and his son James Murdoch in an about-face agreed to appear before a parliamentary panel.

Markets in Europe were stable earlier in the day after Italy completed the sale of 5-year bonds at 4.93%. However, the indexes sold-off in the afternoon after Moody’s placed the U.S. debt rating on negative watch for the first time since 1995.

The Italian Senate approved an austerity budget worth €48 billion or $67 billion spanning over three years by a 161-to-135 vote.

However, these austerity measures have to be approved by the lower house of the Italian Parliament, where the Prime Minister Silvio Berlusconi has a thin majority.

Italy has to implement these austerity measures if the country wants to prevent a bail-out.

In London, FTSE 100 Index declined 59.48 or 1.01% to 5,846.95 and the pound edged higher to $1.6119.

Irish Inflation Steady

Consumer price inflation in Ireland increased 2.7% from a year ago in June, unchanged from the growth recorded in May, according to data released by the Central Statistics Office today.

Prices of food and non-alcoholic beverages rose 0.7% and clothing and footwear prices climbed 4.3% in June.

Consumer prices decreased 0.1% on a monthly basis in June reversing the 0.1% increase in May.

Gainers & Losers

Associated British Foods Plc rose 2.27% to 1,081 pence after the food, ingredients and retail company reported third quarter revenues rose 7% driven by improved performance in most of its divisions.

Avisen plc surged 5.9% to 6.62 pence after the business software solutions provider secured a three-year contract from Unilever N.V.

Rolls-Royce plc gained 1.3% to 659.50 pence after the power systems company won a £50 million contract by Swire Pacific Offshore to supply advanced anchor handling systems for four offshore vessels, currently under construction in Singapore.

Sports Direct International Plc fell 1.36% to 254.50 pence after the sporting goods retailer reported fiscal year 2011 revenues grew 10.2% to £1.6 billion from £1.45 billion in the previous year. Profit before tax for the year declined 0.6% to £118.79 million from £119.5 million in the previous year.

Yell Group Plc plunged 23.6% to 8.40 pence after the publisher of international telephone directories said it will return to growth, with improved financial performance by 2015.