UK Home Loans Rise; Weir Group Buy Seaboard Holdings

Arthi Gupta
23 Nov, 2011
New York City

The UK indexes dropped after mortgage approvals rose in October. The Bank of England policymakers were unanimous on maintaining the asset purchase program and leaving the key rate unchanged. Weir Group agreed to acquire an oil service company for

[R]3:55 PM London – The UK indexes dropped after mortgage approvals rose in October. The Bank of England policymakers were unanimous on maintaining the asset purchase program and leaving the key rate unchanged. Weir Group agreed to acquire an oil service company for £431 million.[/R]

UK indexes and stocks declined after international markets edged lower and commodities weakened.

Markets in Europe fell after banks sought more capital from central bank, the U.S. lowered economic growth estimate and China recorded fastest decline in manufacturing since March 2009 and the rupee in India extended losses.

Chinese manufacturing slumped to a 32-month low according to the flash Markit/HSBC purchasing managers'' index for the secto declined to 48 in November from 51 in October.

The rupee in India declined for the eighth day in a row and tumbled to record low on the worries that foreign investors may pull capital and economic growth may be lower than the target of between 7% and 7.5%.

The Bank of England policymakers were unanimous on maintaining the asset purchase program this month and decided to leave the interest rate unchanged at a record low of 0.5% at the meeting held on November 9 and 10, the minutes of the meeting showed today.

In London, FTSE 100 Index declined 45.23 or 0.9% to 5,161.41 and the pound edged lower to $1.5557.

UK Mortgage Approvals Rise

The number of mortgage approvals for home purchase increased in October, data released by the British Bankers'' Association showed.

Mortgage approvals rose to 35,295 in October compared with an upwardly revised 33,502 in September.

Weir Group to Buy Seaboard Holdings

Weir Group Plc, a maker of pumps for the mining industry agreed to acquire privately held wellhead solutions provider Seaboard Holdings Inc for $675 million or about £431 million in cash.

The purchase will increase company’s presence in the growing upstream oil and gas markets.

Gainers & Losers

Compass Group Plc fell 2.5% to 546 pence after the catering group reported fiscal year 2011 revenues climbed 9.4% to £15.83 billion from last year''s £14.47 billion. Pre-tax profit for the period grew 4.9% to £958 million from £913 million the prior year.

Daily Mail & General Trust Plc gained 0.5% to 386.80 pence after the multimedia and information provider said for the year to October 2, revenue rose 1% to £1.99 billion from £1.97 billion in the previous year. Profit for the year dropped 44.1% to £111.6 million or 29.1 pence per share from £199.8 million or 52.1 pence per share last year.

JD Sports Fashion Plc plunged 6.4% to 762.50 pence after the sports fashion retailer reported gross like-for-like sales growth for the second-half edged up 0.2%, as a 1.3% rise in Fashion Fascias sales was partly offset by a 0.1% drop in Sports Fascias.

Johnson Matthey plc slid 1.1% to 1,750 pence after the platinum refiner reported first-half revenues increased 29.4% to £5.90 billion from £4.56 billion in the year-ago period. Profit in the period rose 43% to £149.4 million compared to £104.7 million in the prior year. Underlying earnings per share rose to 72.8 pence from 56.3 pence in the previous year.

United Utilities Group Plc declined 1.2% to 602.50 pence after the water utility reported first-half revenue increased 4% to £792.7 million from last year''s £762.4 million, reflecting mainly a 4.5% nominal regulated price increase.

Profit after tax dropped 7.6% to £141.7 million or 20.8 pence per share from £153.4 million or 22.5 pence per share in the prior-year period.