UK Indexes Decline 2%; Home Prices Climb 0.7%

Arthi Gupta
19 Sep, 2011
New York City

The UK indexes slumped 2% on the ongoing European debt crisis. European finance ministers failed to approve the Greek bailout portion. The UK household finance index eased but home prices climbed in September.

[R]4:00 PM London – The UK indexes slumped 2% on the ongoing European debt crisis. European finance ministers failed to approve the Greek bailout portion. The UK household finance index eased but home prices climbed in September.[/R]

UK indexes dropped 2% after European finance ministers failed to approve the Greek bailout portion. The lack of agreement among ministers highlighted the differing priorities in the region and raised the prospect of Greek default.

A decision to release the next tranche of bailout money for Greece has been delayed until October.

German Chancellor Angela Merkel''s party suffered another defeat in the regional elections in Berlin.

The Bank of England said on Monday that the £200 billion bond purchase plan between 2009 and early 2010 raised UK''s Gross Domestic Product by 1.5% to 2% and increased inflation between 0.75 percentage points and 1.5 percentage points.

In London, FTSE 100 Index fell 119.44 or 2.2% to 5,249.36 and the pound edged lower to $1.5729.

UK Household Finance Index Eases

UK''s household finance index eased in September, data released by Markit Economics showed today.

The headline household finance index increased to 35.1 in September from 33.2 in August, the lowest reading in the series history.

UK Home Prices Climb

The average asking price for a home in the United Kingdom rose 0.7% in September following a 2.1% slump in August, Rightmove said.

On an annual basis, home prices gained 1.5% in September after easing 0.3% in August.

Gainers & Losers

Axis-Shield Plc dipped 0.1% to 460 pence after the provider of in-vitro diagnostic tests and equipment for laboratory and near patient use reiterated that the offer posted by Alere AS Holdings Limited on August 11 of 460 pence per share fundamentally undervalues Axis-Shield and its prospects, and it recommends that shareholders do not accept the offer and should take no action.

French Connection Group plc plunged 5.8% to 97 pence after the international retailer reported first-half revenue increased 1.3% to £102.8 million from £101.5 million. Pre-tax profit for the period was £0.7 million compared to a loss of £1.0 million in the prior-year.

Globo plc declined 3.3% to 22.25 pence after the international information technology company said first-half revenues surged 57% to €19.6 million from €12.5 million in first-half 2010. Profit before tax for the period soared 129% to €3.2 million compared to last year''s €1.4 million. Earnings per share were €0.009 this year as against €0.007 a year ago.

Taylor Wimpey plc plummeted 4.3% to 33 pence after the homebuilder said it is ""firmly on course"" to achieve a double digit operating margin in its UK business in 2012.

The Capita Group plc fell 1.43% to 723 pence after the provider of business process outsourcing solutions agreed to acquire Vertex Private Sector, a subsidiary of outsourcing services provider Vertex Group, for £40.5 million in cash.