UK Shop Price Inflation Eases; HSBC Sells Assets for $914 M

Arthi Gupta
07 Mar, 2012
New York City

The UK indexes pared losses of yesterday after better-than-estimated job data in the U.S. The UK shop price inflation eased to a two-year low but permanent job placements rose in February. HSBC agreed to sell its general insurance businesses to AXA and QBE.

[R]3:30 PM London – The UK indexes pared losses of yesterday after better-than-estimated job data in the U.S. The UK shop price inflation eased to a two-year low but permanent job placements rose in February. HSBC agreed to sell its general insurance businesses to AXA and QBE.[/R]

The UK indexes advanced after the U.S. reported better-than-anticipated private employment data but investors were cautious ahead of the Greek bond swap program results.

Private investors in Greece will have to decide by tomorrow whether to take a 53.5% haircut of their existing Greek holdings in exchange for new bonds that pay lower interest rate.

At least 40% of private holders of Greek debt have agreed to the swap but uncertainty reigns if hedge funds will participate in the swap or challenge the offer in courts that may drag for more than a decade.

Global economic outlook is worsening after Australia reported weakest growth since 2008 and Brazil’s economy expanded at 2.7% in 2011 after surging at 7.5% in 2010.

In London trading FTSE 100 Index gained 5.60 or 0.1% to 5,770.65 and the pound edged lower to $1.5715.

UK Shop Price Inflation Eases

Shop price inflation in the UK eased to 1.2% in February from 1.4% in January, the British Retail Consortium said.

Non-food prices declined 0.7%, while food inflation accelerated to 4.2% in February.

Separately, permanent placements in the United Kingdom rose to a 9-month high in February, according to the latest data released by consultants KPMG-REC.

Gainers & Losers

Cobham plc surged 12% to 208.60 pence after the defence technology group said fiscal year 2011 group revenue fell 3% to £1,854 million from £1,903 million. The underlying pre-tax profit for the year rose 7% to £328 million from £306 million.

HSBC Holdings plc climbed 0.4% to 550.50 pence after the financial services company agreed to sell its general-insurance businesses in Hong Kong, Singapore, Argentina and Mexico to AXA Group and Australia''s QBE Insurance Group Ltd. for about $914 million cash.

Jupiter Fund Management PLC rose 0.9% to 241.70 pence after the asset manager said fiscal 2011 net revenue increased 8% to £248.5 million from £230.5 million the year before. Profit before tax surged 66% to £70.3 million from £42.4 million the year before.

Rolls-Royce Holding PLC advanced 1.4% to 812 pence after the provider of power systems and services and the United States Air Force will soon begin flight tests of an engine upgrade for the T56 turboprop engine, which powers the C-130H transport aircraft.