Resources Heavy UK Indexes Drop, Michael Page Plunges 7%

Arthi Gupta
22 Jun, 2012
New York City

The UK indexes turned lower after home price sentiment index remained unchanged in June. Investors focused on the rising prospects of a larger bailout in Spain and growing problem at domestic banks. Banks rose despite a rating agency downgrade.

[R]3:00 PM London – The UK indexes turned lower after home price sentiment index remained unchanged in June. Investors focused on the rising prospects of a larger bailout in Spain and growing problem at domestic banks. Banks rose despite a rating agency downgrade.[/R]

The UK indexes traded lower tracking weak Europe and U.S. markets and banks were in focus after Moody’s cut ratings of 15 U.S. banks with global operations. However, investors deemed the action too late and too little and banks traded higher.

Royal Bank of Scotland rose 1.5%, Barclays gained 0.5%, HSBC Holdings climbed 0.7%, and Lloyds Banking Group gained 1.6% despite a ratings agency downgrade.

In London, the benchmark index FTSE 100 fell 30.82 or 0.6% to 5,536.25 and the pound edged lower to $1.5593.

For the week, the FTSE 100 gained 1%. The benchmark index heavily weighted in resource stocks has come under pressure in the last two months as prices of gold, oil and copper fall.

Crude oil extended losses for the ninth month and declined 21% in the year so far and gold held at 1% gain in the year. Copper and silver have also suffered double digit declines in the year so far.

UK Home Price Sentiment Flat

UK households perceive a decline in value of their homes in June, data from a survey by Knight Frank and Markit Economics showed today.

The home price sentiment index remained unchanged at 46.3 in June, 24th consecutive month that households perceive the value of their property to have fallen. The latest reading was lower than the 20-month high of 46.6 in March.

Gainers & Losers

Michael Page International Plc, the recruitment services company plunged 6.8% to 356 pence after a broker downgrade.

BHP Billiton fell 2.1% and Rio Tinto dropped 1.6% as oil and precious metal prices declined.

Xcite Energy Limited rose 0.3% to 79.25 pence after the oil company inked a $155 million secured reserves based loan facility agreement for the Bentley field.