UK Production Rebounds and Markets Extend Gains

Arthi Gupta
07 Sep, 2012
New York City

The UK indexes traded higher after industrial production rebounded in July and output prices rose in August. New construction orders in the UK rose 0.2% in the second quarter.

[R]4:30 PM London – The UK indexes traded higher after industrial production rebounded in July and output prices rose in August. New construction orders in the UK rose 0.2% in the second quarter.[/R]

The UK indexes traded in the positive territory following the market advance for the second day on the Continent after the central bank moved to shore up confidence in the euro.

Investors also took note of the better than expected industrial production in July and new construction orders increased.

In London, the benchmark index FTSE 100 gained 19.14 or 0.3% to 5,796.58 and the pound edged higher to $1.5995.

For the week, the FTSE 100 rose 1.9%.

UK Production Rebounds

UK industrial production rebounded in July, data from the Office for National Statistics showed.

Industrial output grew 2.9% on a monthly basis in July from the 2.4% drop in June.

Manufacturing output climbed 3.2% in July compared to the 2.9% decline in June.

On a yearly basis, overall production eased 0.8% in July, following a 3.8% fall in June. Annually, manufacturing output slowed to 0.5% in July from 3.9% in June.

In another report, the total volume of all new construction orders in the second quarter is estimated to have increased 0.2% compared with the first quarter and is 11.1% higher than the second quarter of 2011.

UK Output Price Index Rises

UK output price index for home sales of manufactured products rose 2.2% annually in August compared with a rise of 1.8% last month, the Office for National Statistics said today.

The output index for home sales of manufactured products rose 0.5% on a monthly basis in August compared with a rise of 0.1% in July.

The total input price index rose 1.4% annually in August compared with a fall of 2.4% last month. On a monthly basis, the total input price index rose 2% in August compared with a rise of 0.4% in July.

Separately, inflation is estimated to be lower than what was forecast in May, according to results of a quarterly survey by the Bank of England and GfK NOP.

Median expectations of the rate of inflation over the coming year were 3.2% compared with 3.7% in May, the latest Inflation Attitudes survey said. People estimated the current rate of inflation was 4.1% compared with 4.7% in May.

The latest survey was carried out between August 9 and 14 among 1,929 people aged 16 and over in 175 randomly selected output areas throughout the United Kingdom.

Gainers & Losers

Capital Shopping Centres Group PLC gained 0.3% to 344.30 pence after the mall developer refuted an article in Estates Gazette that the company is shelving its plans for development of the Victoria Centre, Nottingham.

Cobham plc rose 0.1% to 219.2 pence after the aviation services and aerospace support company was awarded a five-year contract worth $15 million, to supply On-Board Inert Gas Generating System nitrogen inert units for the U.S. Army''s AH-64 apache helicopters.

Glencore International plc slumped 4.4% to 375 pence after the commodities trader lifted its offer for Xstrata Plc to 3.05 of its shares for each Xstrata share from the 2.8 shares offered earlier.

In addition, Glencore''s CEO Ivan Glasenberg will take the helm at the combined company.