UK Index in Weekly 5% Loss; Autonomy Surges on HP Bid

Arthi Gupta
19 Aug, 2011
New York City

The UK indexes traded lower on escalating economic worries in the U.S. and the rising tensions in the euro area. The UK budget deficit was less than estimated in July. Autonomy surged 75% on a takeover proposal of

[R]3:15 PM London – The UK indexes traded lower on escalating economic worries in the U.S. and the rising tensions in the euro area. The UK budget deficit was less than estimated in July. Autonomy surged 75% on a takeover proposal of £6 billion from Hewlett-Packard.[/R]

The UK indexes are trading lower tracking the losses in the European and Asian markets. Banks were again in focus on the worries that widening euro-zone contagion may prompt more losses.

European indexes slumped more than 4% after investors focused on the weak U.S. economic data and questioned the health of the euro-zone banking system.

UBS AG and Credit Suisse denied reports today that they used the New York Federal Reserve Swap Facility through the Swiss National Bank.

In London, FTSE 100 Index fell 44.53 or 0.9% to 5,047.88 and the pound edged higher to $1.6543. For the week, the FTSE 100 Index slumped 5%.

UK Public Sector Net Borrowing Drops

The UK budget deficit fell in July on higher revenue from taxes and a new bank levy, according to official data published today.

The UK public sector net borrowing, excluding financial interventions, declined to £20 million in July from £3.5 billion registered in the same period of last year, data from the Office for National Statistics showed.

Public sector net debt at the end of July was £940.1 billion, equivalent to 61.4% of GDP, bigger than the £805.5 billion debt during the corresponding period a year ago.

The new bank levy added £660 million revenue in July. Further, higher corporation taxes boosted government receipts.

Gainers & Losers

Autonomy Corp. PLC surged 74.60% to 2,495 pence after the infrastructure software firm confirmed that it has received a $10 billion or £6 billion takeover bid from Hewlett-Packard.

British Sky Broadcasting Group Plc fell 1.5% to 625 pence after the satellite broadcasting company’s control over pay-TV movie rights in the country is restricting competition between pay-TV providers, leading to higher prices and reduced choice and innovation for subscribers, according to a statement by the UK''s Competition Commission.

The Innovation Group PLC declined 2.47% to 19.75 pence after the software firm said it is confident of meeting company expectations for the current financial year despite prevailing economic conditions.

Stagecoach Group Plc soared 4.53% to 242.40 pence after the public transport operator proposed to return around £340 million or $561.38 million to its shareholders.

WPP plc dropped 2.66% to 585 pence after the media communications services company’s digital arm, WPP Digital, agreed to acquire Rockfish Interactive Corp.