UK Home Prices Fall, Retail Sales Improve; Cairn Energy Up

Arthi Gupta
10 Jan, 2012
New York City

The UK indexes traded higher after banking and mining stocks rose and retail sales improved but home prices continued to fall in December. Irish manufacturing output declined in November.

[R]3:00 PM London – The UK indexes traded higher after banking and mining stocks rose and retail sales improved but home prices continued to fall in December. Irish manufacturing output declined in November.[/R]

The UK indexes gained and banking and mining stocks led the advancing stocks. Better-than-anticipated economic data from China also boosted investor sentiment.

Among miners, Antofagasta surged 4.9%, Vedanta soared 5.5%, BHP climbed 1.3% and Rio Tinto advanced 3%.

In banking stocks, Barclays surged 5%, Lloyds Banking climbed 3%, and Royal Bank of Scotland soared 3.2%.

Chinese trade data was mixed, with surplus widening in December, as both export and import growth eased amid slowing demand from Europe, data from the customs agency showed.

Exports grew 13.4% from a year ago in December, slower than the 13.8% growth recorded in November. Imports rose 11.8% from last year in December.

The trade surplus advanced to $16.52 billion in December, from the $14.5 billion in November.

The UK recovery is stalling, but the situation is better than in the worst phase of the last downturn, according to Quarterly Economic Survey from the British Chambers of Commerce, based on a survey of 6,000 businesses.

In London, FTSE 100 Index gained 89.83 or 1.6% to 5,701.89 and the pound edged higher to $1.5466.

UK Home Prices Fall

Home prices continued to fall across all regions in the UK in December except in London, according to a survey by the Royal Institution of Chartered Surveyors.

The seasonally adjusted house price balance was -16 in December, up from -17 in November.

UK Retail Sales Improve

The UK retail sector performed strongly in December, according to the British Retail Consortium.

Overall retail sales in the UK rose 4.1% in December, against a 1.5% increase in December 2010.

On a like-for-like basis, sales for December 2011 were 2.2% higher than the previous year.

Irish Output Slumps

Ireland''s manufacturing production decreased 3.4% on an annual basis in November, reversing the 13.2% increase in October, data released by the Central Statistics Office showed.

On a monthly basis, factory production decreased a seasonally adjusted 10.3% in November, following the 7.5% gain in October.

However, turnover in Ireland''s manufacturing industry increased 10.2% on a monthly basis in November, taking the annual growth to 12.1%, the agency said.

Gainers & Losers

Cairn Energy Plc soared 3% to 269.70 pence after the oil and gas explorer said its shareholders will receive £1.60 per share for each existing ordinary share, as part of its proposed return of cash following the sale of its 40% stake in Cairn India Ltd. to Vedanta Resources Plc.

Debenhams plc surged 9.8% to 62.50 pence after the department store group reported for the 18 weeks ended January 7, gross transaction value edged up 0.5% and like-for-like sales, including VAT, grew 1.4% from the previous year.

Diageo plc climbed 0.2% to 1,418.50 pence after the food and beverages company closed the acquisition of Meta Abo Brewery Share Company SC with the purchase of the entire share capital for $225 million.

Marks & Spencer Group Plc advanced 3% to 317.70 pence after the retailer said third quarter group sales increased 2.4% excluding value-added tax.

Shire plc dipped 0.3% to 2,164 pence after the specialty biopharmaceutical company acquired the rights to develop and market Resolor in the United States in an agreement with Janssen Pharmaceutica N.V. Terms of the agreement were not been disclosed.