UK Manufacturing Contracts; BP Sells Canadian Gas Unit

Arthi Gupta
01 Dec, 2011
New York City

The UK indexes pared gains after successful bond offerings from France and Spain but cautious comments from the ECB President. UK and Irish manufacturing output declined in November. The Bank of England urged banks to boost their capital levels.

[R]4:00 PM London – The UK indexes pared gains after successful bond offerings from France and Spain but cautious comments from the ECB President. UK and Irish manufacturing output declined in November. The Bank of England urged banks to boost their capital levels.[/R]

The UK indexes pared gains after the European Central Bank President Mario Draghi offered cautious view about the euro and the euro zone and lifted hopes that another rate cut may be in the works.

Indexes in London gained after European bond auctions saw strong demand. Spain sold €3.75 billion of government bonds and France sold €4.35 billion in notes. Italian 10-year bond yields declined 27 basis points to 6.75% after the auctions, below the precarious level of 7%.

The Bank of England urged banks to boost their capital levels further given the risks from the worsening debt crisis in the euro area and a global slowdown in its latest Financial Stability Report, released on Thursday.

In London, FTSE 100 Index gained 29.44 or 0.6% to 5,534.62 and the pound edged higher to $1.5724.

UK Manufacturing Contracts

UK manufacturing output fell for the second month in a row in November, data from a survey by Markit Economics and CIPS showed today.

The seasonally adjusted purchasing managers'' index for the manufacturing sector dropped to 47.6 in November from 47.8 in October, revised up from 47.4. The rate of decline in November was the fastest in two-and-half years.

Irish Manufacturing Shrinks

Activity in the Irish manufacturing sector declined in November, data from a survey by NCB and Markit Economics showed on Thursday.

The seasonally adjusted purchasing managers'' index for the manufacturing sector decreased to 48.5 in November from 50.1 in October.

BP Agrees to Sell Canadian NGL Business

BP agreed to sell its Canadian natural gas liquids business to Plains Midstream Canada ULC, a wholly-owned subsidiary of Plains All American Pipeline, L.P. for $1.67 billion in cash.

Gainers & Losers

Centrica Plc rose 0.2% to 302.40 pence after the utility estimates a 50% growth in upstream production to reach 75 million barrel oil equivalent annually in the next 3 to 5 years. It also anticipates increasing its share of offshore wind capacity by 300% to 560MW by 2016.

K3 Business Technology Group Plc surged 31% to 158.20 pence after the supplier of business planning and management software announced the receipt of a takeover approach from Claesson, its largest shareholder.

Kingfisher Plc climbed 3.1% to 263.40 pence after the home improvement retailer reported third total sales grew 4.6% to £2.81 billion, with growth in each of the three main operating divisions. On a constant currency basis, sales rose 3.5%.

Rio Tinto increased 1% to 3,373 pence after the miner extended its offer to acquire all the common shares of Hathor Exploration for C$4.70 in cash by 10 days to December 12.

Rolls-Royce Group plc gained 2.4% to 746.50 pence after the aircraft-engine maker secured a $350 million contract from Hawaiian Airlines to deliver Trent 700 engines to power five Airbus A330 aircraft.

Vodafone Group plc rose 1.4% to 174.60 pence after the mobile communications company said its Vodafone Global Enterprise is acquiring European IT and communications consultancy, Bluefish Communications Ltd.