UK Retail Sales Climb, Libor Scandal Scrutiny Widens

Arthi Gupta
19 Jul, 2012
New York City

The UK indexes were nearly flat as regulators around the world widen the Libor scandal investigation. UK gross mortgage lending declined but retail sales increased in June. Kingfisher slumped 2.6% on weak outlook.

[R]3:45 PM London – The UK indexes were nearly flat as regulators around the world widen the Libor scandal investigation. UK gross mortgage lending declined but retail sales increased in June. Kingfisher slumped 2.6% on weak outlook.[/R]

UK indexes inched higher in a volatile trading after the release of mixed economic data and ongoing worries related to the euro zone.

Banks were also under pressure after regulators around the world step up the scrutiny of banks involved in Libor scandal.

UK and European regulators are focusing on collusion among traders at Credit Suisse, Credit Agricole, Deutsche Bank and HSBC. The news was first reported by Financial Times and independently verified by 123jump research staff.

U.S. regulators and lawmakers are zoning in the possible involvement of banks based in New York. U.S. House Representative Randy Neugebauer and chairman of House Financial Services subcommittee is investigating Libor scandal and is seeking records and documents of communication between the New York Fed and Bank of America, Citigroup and JPMorgan Chase.

In addition, regulators in Japan are looking at closely for the possible involvement of Sumitomo Mitsui Financial and Nomura.

In London, the benchmark index FTSE 100 gained 13.20 or 0.2% to 5,698.79 and the pound edged higher to $1.5698.

UK Gross Mortgage Lending Falls

UK gross mortgage lending in June was £11.9 billion, representing a 5% fall both from the previous month of £12.5 billion and from June 2011 of £12.6 billion, the Council of Mortgage Lenders said today.

Lending in the first half of this year totaled £67.9 billion, 7% higher than the first six months of 2011.

UK Retail Sales Climb

The UK retail sales, including automotive fuel rose just 0.1% from a month ago in June compared to the 1.5% rise in May, the Office for National Statistics said.

Food sales fell 0.7%, but non-food sales advanced 1.2% in June and excluding automotive fuel, retail sales rose 0.3% in June from a month ago.

Separately, UK automobile production increased 14.1% in the first half, the Society of Motor Manufacturers and Traders reported today.

Commercial vehicle output fell 8.7% in the first-half.

Gainers & Losers

BP plc rose 0.02% to $41.74 after the oil and gas explorer and Kinder Morgan entered into long-term agreements.

John Wood Group Plc soared 2.8% to 763 pence after the energy services company announced that Ian Wood will retire as Chairman and from the board.

Kingfisher plc slumped 2.6% to $8.50 after the home improvement retailer reported a 3.7% increase in total sales in constant currencies for ten weeks to July 7. However, sales edged down 0.4% on a comparable basis.

Lloyds Banking Group PLC climbed 0.9% to 30.05 pence after the financial services provider said it has agreed non-binding heads of terms with the Co-operative Group Plc for the mandated retail and commercial divestment known as Verde.

Mitchells & Butlers plc soared 3% to 260.30 pence after the pubs and restaurants operator said comparable sales rose 0.4% in 14 weeks to July 14 and 1.9% for the 42-week period of the year to date.