UK Indexes Down 1.1%; Essar Energy Swings to Loss

Arthi Gupta
27 Feb, 2012
New York City

The UK indexes edged lower on renewed euro zone worries, a spike in oil prices and an inconclusive G20 meeting at the weekend. The UK home prices remained flat in February. Vedanta confirmed merger of its Indian iron ore and copper divisions.

[R]3:00 PM London – The UK indexes edged lower on renewed euro zone worries, a spike in oil prices and an inconclusive G20 meeting at the weekend. The UK home prices remained flat in February. Vedanta confirmed merger of its Indian iron ore and copper divisions.[/R]

The UK indexes dropped 1.1% after the G20 finance ministers rebuffed the calls for more lending to the euro zone nations.

Ministers from largest 20 economies called on European leaders to increase the size of financial rescue fund before seeking help from the International Monetary Fund. However, Germany has resisted the calls to increase the fund size before countries begin to implement tougher austerity measures and lower government deficits.

The recent spike in oil prices as also added to investors’ woes.

In London trading FTSE 100 Index fell 63.49 or 1.1% to 5,871.75 and the pound edged higher to $1.5843.

UK Home Prices Flat

The average price of a home in the United Kingdom remained flat in February dropping 1.4% from a year ago, according to the results of the latest survey from Hometrack.

Gainers & Losers

Essar Energy PLC plunged 10.1% to 113.20 pence after the Indian-focused oil refiner reported fiscal 2011 sales increased 60% to $15.97 billion. Net loss for the full year was $568.2 million compared to a profit of $248.3 million a year earlier, due to it reversing a previously-recognized sales tax benefit.

HSBC Holdings Plc fell 4% to 552 pence after the banking and financial services company said fiscal year 2011 pre-tax profit rose 15% to $21.87 billion from $19.04 billion a year ago. For the year, net interest income grew 3% to $40.66 billion from $39.44 billion in the previous year.

Net profit for the year soared 28% to $16.8 billion from $13.16 billion in 2010.

Pearson Plc slumped 4.6% to 1,194 pence after the text book publisher reported 2011 sales rose 4% to £5.86 billion from £5.66 billion a year earlier. In the year, pre-tax profit advanced 72% to £1.16 billion from £670 million in 2010. The company has lifted text book prices in the U.S. steadily in the last ten years by more than 100% despite low inflation.

Vedanta Resources plc rose 0.4% to 1,506 pence after the diversified metals and mines operator confirmed that it will be merging its Indian iron ore and copper divisions, Sesa Goa and Sterlite, respectively, to create a new single entity Sesa Sterlite.

Vodafone Group plc gained 0.03% to 171.80 pence after the mobile phone services provider and Visa Inc. announced a worldwide partnership to enable consumers to pay for goods and services using their mobile phones.