UK Indexes Plunges 4%; Retail Sales Growth Slows to 0.2%

Arthi Gupta
18 Aug, 2011
New York City

The UK indexes slumped on weak global outlook. The UK retail sales grew less than anticipated, auto production rose, and mortgage lending dipped in July. Irish factory prices fell in July.

[R]3:30 PM London – The UK indexes slumped on weak global outlook. The UK retail sales grew less than anticipated, auto production rose, and mortgage lending dipped in July. Irish factory prices fell in July.[/R]

Stocks in London plunged nearly 4% tracking a worldwide sell-off that dragged markets in Europe and Asia. The indexes accelerated the decline after New York index fell more than 3% in the first hour trading on weak employment report.

In London, FTSE 100 Index plunged 211.73 or 3.97% to 5,119.87 and the pound edged lower to $1.6506.

UK Retail Sales Eases

The UK retail sales, including automotive fuel rose 0.2% in July compared to the revised 0.8% gain in June, according to data released by the Office for National Statistics today.

On a yearly basis, sales volume remained flat in July after rising 0.4% in June.

Retail sales, excluding automotive fuel, gained 0.2% on a monthly basis in July as against the 1% rise recorded in June.

From a year ago, sales fell 0.2% in July, offsetting the 0.2% rise in June.

UK Car Production Increases

The UK car production rose 1.3% in July from a year ago to 98,094 units, the Society of Motor Manufacturers and Traders said today. The increase in production was 3.7% for the first seven months of the year.

UK Mortgage Lending Dips

UK gross mortgage lending dipped 1% in July from June to £12.6 billion, the Council of Mortgage Lenders said.

There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion, according to data.

Irish Factory Prices Fall

The manufacturing output price index for Ireland dropped 0.4% from a year ago in July following a 1% decline in June. On a monthly basis, prices recorded no growth after a 0.8% decrease in June.

Foster''s Urges Shareholders to Reject SABMiller Offer

Foster''s Group Ltd.''s, the Australian beer maker urged its shareholders to reject a A$4.90 per share takeover bid by British brewer SABMiller plc saying the offer significantly undervalues the company and is highly conditional

Earlier, SABMiller said it will take its bid worth A$9.51 billion or about $9.97 billion directly to Foster''s shareholders, after the Australian company''s Board rejected an initial confidential proposal.

Gainers & Losers

Anglo American Plc plummeted 4.49% to 2,360 pence after the mining company reported the approval of the expansion of Cerrejon, its 33% owned coal mine in La Guajira, Colombia.

The $1.3 billion expansion project would increase Cerrejon''s production and export capacity by 8 million tonnes per annum to 40 mtpa, the company added.

Holidaybreak PLC dipped 0.12% to 426.50 pence after the European specialist holiday group said it is performing “in-line with management expectations” for the year ending September 30, with 98% of target Group revenue booked.

London Capital Group Holdings plc gained 0.7% to 70 pence after the financial services firm said first-half revenues declined 12% to £18.34 million from £20.90 million in the year-ago period. Profit for the period soared to £1.76 million or 3.89 pence per share from £541,000 or 1.37 pence per share in the previous year.

Smiths Group Plc plunged 5.62% to 915 pence after the technology company''s division, John Crane, announced the purchase of the business and assets of Turbo Components and Engineering Inc. for an undisclosed price.

Xaar plc slumped 3.3% to 268 pence after the supplier of piezoelectric industrial inkjet printheads stated first-half revenue surged 33% to £31.6 million from £23.82 million in the same period last year. Profit for the period soared 113% to £3.02 million or 4.1 pence per share versus £1.42 million or 2.2 pence per share in the prior year.