UK Retail Sales Rise; Kingfisher, SAB Miller in Focus

Arthi Gupta
21 Jul, 2011
New York City

The UK indexes traded higher after retail sales rose 0.3% and public sector net borrowing fell in June. Investors turned cautious ahead of the European ministers

[R]3:30 PM London – The UK indexes traded higher after retail sales rose 0.3% and public sector net borrowing fell in June. Investors turned cautious ahead of the European ministers’ summit that is expected to finalize the Greek bailout. Kingfisher quarterly same store sales declined 0.5%.[/R]

Investors stayed on the sidelines ahead of the meeting of U.S. President Barack Obama with the Republican leaders to seek a bi-partisan solution to the debt-ceiling debate.

Investors also focused on the euro-zone summit later today in Brussels to provide a second bailout package for Greece. A compromise solution between Germany and France is expected to pave the way for a bailout that may lead to a selective Greek debt default and may lower total debt.

In London, FTSE 100 Index gained 25.01 or 0.4% to 5,879.43 and the pound edged lower to $1.6187.

UK Retail Sales Rise

UK retail sales increased in June, as retailers resorted to price discounting to lure consumers.

Sales, including automotive fuel, rose 0.7% on a monthly basis in June compared to a revised 1.3% drop in May, according to data published from the Office for National Statistics today.

UK volume of retail sales in June increased 0.3% from a year ago month. Predominantly food stores sales decreased by 4.2%.

UK Public Sector Net Borrowing Falls

The UK public sector net borrowing excluding financial interventions declined to £13.98 billion in June, from £16.62 billion in May, the Office for National Statistics said.

Public sector net borrowing fell to £11.98 billion in June as against £14.59 billion in May.

Gainers & Losers

Capita Group Plc fell 2.1% to 682.50 pence after the professional support solutions provider reported first-half revenues increased 3% to £1.4 billion from £1.36 billion in the same period last year. Profit before tax for the period increased 7% to £141.4 million from £132.4 million reported last year.

Greene King plc declined 0.7% to 484.40 pence after the holding company said it acquired a total of 1.8 million Capital Pub Company Plc''s shares at a price of 235 pence per share.

Halfords Group Plc slumped 3.58% to 344.40 pence after the automotive products retailer said first quarter total sales increased 0.3% from last year.

Kingfisher Plc gained 2.80% to 260.30 pence after the home improvement retailer total like-for-like sales for the second quarter edged down 0.5% as difficult trading environment in UK more than offset strong sales in France and other regions.

Total sales in constant currencies increased just 1%.

SABMiller Plc slid 1.14% to 2,288.50 pence after the brewer stated fiscal first quarter lager and soft drinks volumes, on an organic basis, grew 5%.