UK Manufacturing Declines; HSBC Plans 30,000 Jobs Cut

Arthi Gupta
01 Aug, 2011
New York City

The UK indexes rose after the U.S. lawmakers agreed on a broad framework of deficit cut that requires approval of two legislative bodies. Manufacturing activity in the UK declined in July. HSBC first-half net rose 36% and the firm planned to cut 30,000 jobs by the end of 2013.

[R]3:30 PM London – The UK indexes rose after the U.S. lawmakers agreed on a broad framework of deficit cut that requires approval of two legislative bodies. Manufacturing activity in the UK declined in July. HSBC first-half net rose 36% and the firm planned to cut 30,000 jobs by the end of 2013.[/R]

U.S. President Barack Obama announced that the leaders of the Republican and Democratic parties have agreed on a deal to raise the U.S. debt ceiling just ahead of the August 2 deadline.

The tentative agreement still needs approvals from the Senate and the House that will cut about $2.2 trillion in spending over the next 10 years and allow the government to raise debt in two steps by $2.2 trillion that will be sufficient till 2013.

In London, FTSE 100 Index gained 20.10 or 0.35% to 5,834.97 and the pound edged lower to $1.6328.

UK Manufacturing Declines

The UK manufacturing sector declined for the first time in two years in July, Markit Economics said today.

The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers'' Index for the manufacturing sector fell to 49.1 in July from a revised reading of 51.4 in June. The latest reading was the weakest since June 2009.

Output rose marginally and new business decreased in July.

First Niagara Acquires HSBC Branches

First Niagara Bank, N.A., a subsidiary of First Niagara Financial Group, Inc. agreed to acquire 195 Upstate New York and Connecticut branches and $15 billion of deposits from HSBC Bank USA, N.A. for about $1 billion.

Gainers & Losers

AorTech International plc plunged 4.69% to 193 pence after the medical device development and bio materials company said fiscal year 2011 revenue grew 15.4% to £1.57 million from £1.36 million a year ago. Net loss for the year widened 30.2% to £2.5 million or 51.75 pence per share compared to £1.92 million or 39.79 pence per share last year.

Hammerson Plc gained 2.10% to 475.60 pence after the real estate investment trust reported first-half profit decreased 43% to £188.3 million from £333 million in the same period last year. Earnings per share slipped to 26.6 pence from 47.3 pence in the prior-year period.

HSBC Holdings Plc soared 3.11% to 613 pence after the banking and financial services company reported first-half revenues, net operating income before loan impairment charges and other credit risk provisions, edged up 0.4% to $35.69 billion from $35.55 billion a year ago. Net profit attributable to ordinary shareholders rose 36% to $9.22 billion from $6.76 billion last year.

In addition, the bank said it would cut a further 25,000 jobs between now and 2013 as a part of a broader cost-cutting drive. The firm targets $2.5 billion to $3.5 billion of sustainable cost savings by 2013.

Intertek Group Plc surged 6.21% to 2,034 pence after the inspection, product testing and certification company said first-half revenues increased 17% to £763.1 million from £652.6 million. Profit for the period dropped 4.2% to £58.8 million or 32.6 pence per share from £61.4 million or 34.6 pence per share in the same period a year earlier.

Punch Taverns Plc traded at 13.79 pence after the pub operator completed the spin-off of its spirit business to Spirit Pub Co.

After the spin-off, each Punch shareholder will receive one Spirit ordinary share, while continuing to own their existing Punch shares.