UK Indexes Rise; Home Retail Net Plunges 73%

Arthi Gupta
19 Oct, 2011
New York City

The UK indexes gained on the expectations of a larger European rescue fund. The BoE minutes showed policy makers were unanimous in expanding quantitative easing and holding rate at a record low of 0.5%. BSkyB quarterly profit fell 1.3% as investors resist attempts by Murdochs to control the company.

[R]4:00 PM London – The UK indexes advanced on the expectations of a larger European rescue fund. The BoE minutes showed policy makers were unanimous in expanding quantitative easing and holding rate at a record low of 0.5%. BSkyB quarterly profit fell 1.3% as investors resist attempts by Murdochs to control the company.[/R]

Regional leaders in Europe are close to finalizing the details of European rescue fund and overlooked the third downgrade suffered by Spain.

The conflicting media reports suggested that European leaders are likely to increase the European Financial Stability Facility to as high as €2 trillion. European leaders are divided in how to leverage the rescue fund without approaching each member and enough capital to successfully complete the bank recapitalization plan.

Markets are highly sceptical that Europe can quickly leverage the rescue fund from €400 billion to €2 trillion when most of the euro-zone members are against bailout of peripheral euro-zone members.

In London, FTSE 100 Index gained 35.53 or 0.7% to 5,445.98 and the pound edged higher to $1.5818.

The Bank of England policy makers unanimously decided to expand quantitative easing by £75 billion to £275 billion in October, minutes of the meeting released by the Bank of England showed today.

The members also voted unanimously to maintain the interest rate at a record low 0.5% at the meeting held on October 5 and 6.

Gainers & Losers

British Sky Broadcasting Group Plc. surged 4.5% to 706 pence after the satellite-TV provider reported first quarter revenue improved 8.5% to £1.66 billion from £1.53 billion a year ago. Profit for the period fell 1.3% to £225 million or 12.8 pence per share compared to £228 million or 13.0 pence per share last year.

Diageo Plc soared 3.7% to 1,327 pence after the alcohol beverages maker reported first quarter net sales increased 9% with strong growth in all regions as well as the acquisition of Mey Içki.

GKN Plc plunged 4.8% to 185.80 pence after the engineering firm reported third quarter sales grew 11% to £1.48 billion from £1.34 billion in the same quarter last year. Profit before tax rose marginally 1.1% to £89 million, from £88 million reported a year ago.

Home Retail Group Plc plummeted 16.4% to 100.10 pence after the home and general merchandise retailer reported first-half sales declined 6% to £2.57 billion from £2.72 billion last year.

Profit during the period slumped 73% to £20.4 million versus £74.7 million last year. Basic earnings per share plunged to 2.6 pence from 8.8 pence in the prior year.

Separately, the retailer said it would launch a Chinese Argos branded joint venture with Haier Electronics Group Co., Ltd., a unit of Chinese home appliance manufacturer Haier Group.

SABMiller Plc rose 0.6% to 2,275.50 pence after the brewer said lager volumes for the first-half were 3% ahead of last year, and that overall financial performance was in line with its expectations.

Separately, SABMiller and Anadolu Efes announced a strategic long-term partnership, in which SABMiller will transfer its Russian and Ukrainian beer businesses to Anadolu at an enterprise value of about $1.9 billion.