UK Indexes Jump 2.9%; Nationwide Workers Strike

Arthi Gupta
30 Nov, 2011
New York City

The UK indexes soared on coordinated central bank action. Normal life paralyzed in Britain after public-sector workers and teachers went on a strike to protest austerity measures. UK housing equity injections rose in the second quarter.

[R]3:00 PM London – The UK indexes soared on coordinated central bank action. Normal life paralyzed in Britain after public-sector workers and teachers went on a strike to protest austerity measures. UK housing equity injections rose in the second quarter.[/R]

Indexes in London soared after the U.S. Federal Reserve joined with other major central banks in a coordinated effort to boost liquidity to the global financial system.

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will also participate in a coordinated action that will provide additional liquidity and lower interest rate on swap lines.

These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements to 50 basis points from 100 basis points, effective December 5.

""The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,"" read a statement on the Fed''s Web site.

Earlier in the day, investors were jittery after Standard & Poor''s lowered its credit ratings on several financial institutions including UBS, Barclays, HSBC Holdings and Royal Bank of Scotland Group.

Nearly two million public-sector workers and teachers went on a strike in Britain on Wednesday to protest austerity measures that include changes in their pensions.

Chancellor of the Exchequer George Osborne had stated on Tuesday plans to cut an extra 300,000 public-sector jobs and a two-year, one percent cap on public-sector pay rises.

Normal life across the country was hit with most of the schools remaining closed, while hospitals attended only emergencies. Airports and ports are nearly shut down across the nation.

In London, FTSE 100 Index soared 154.65 or 2.9% to 5,491.48 and the pound edged higher to $1.5698.

UK Housing Equity Injections Rise

Households injected £9.1 billion in the second quarter compared to the revised £8.9 billion injection in the first quarter, data from the Bank of England showed today.

Housing equity withdrawal as a percentage of post-tax income declined 3.5% in the second quarter, unchanged from the revised percentage for first quarter.

Gainers & Losers

Britvic Plc rose 1.3% to 340.60 pence after the soft drinks maker reported fiscal year 2011 revenues increased 15.1% to £1.29 billion from £1.12 billion in fiscal year 2010. Pre-tax profit for the year was £79.9 million compared to a pre-tax loss of £28.8 million reported last year.

Marston''s Plc soared 4.9% to 98.05 pence after the brewer and pub operator reported fiscal year 2011 revenues grew 4.8% to £682.2 million from £650.7 million in the preceding year. Pre-tax profit for the year surged 54% to £80.8 million from £52.5 million in the previous year.

Rolls-Royce Holdings Plc climbed 3% to 726 pence after the engine maker said that it received contracts worht $650 million from Brazilian integrated oil and gas firm Petroleo Brasileiro SA or Petrobras to support its exploration activities offshore Brazil.

Sage Group Plc surged 5% to 288.60 pence after the business software firm reported fiscal year 2011 revenues grew 4% to £1.33 billion from last year''s £1.28 billion. Profit for the year declined 16.8% to £189 million or 14.24 pence per share from £227.3 million or 17.23 pence per share in the prior year.

WPP Plc increased 1.9% to 661 pence after the Irish advertising company said its wholly-owned operating company Cohn & Wolfe has agreed to acquire a majority stake in impactasia, an independent public relations agency with an established network of offices throughout Greater China.