UK Confidence at 20-Year Low, Dixons, Marks & Spencer in Focus

Arthi Gupta
10 Sep, 2012
New York City

The UK indexes slid after business confidence plummeted to a 20-year low in August. Shell agreed to sell its 50% working interest in the Holstein Field to Plains Exploration for $560 million. Marks & Spencer Group gained 3% on deal speculation.

[R]5:05 PM London – The UK indexes slid after business confidence plummeted to a 20-year low in August. Shell agreed to sell its 50% working interest in the Holstein Field to Plains Exploration for $560 million. Marks & Spencer Group gained 3% on deal speculation.[/R]

The UK indexes traded weak on the first day of the week after sharp swings in the previous week as political leaders and central bankers make policy announcements.

Latest Chinese economic data also showed a decline in imports and a slowdown in industrial production.

In domestic news, the UK business confidence plummeted to a 20-year low in August.

In London, the benchmark index FTSE 100 declined 2.61 or 0.1% to 5,792.19 and the pound edged lower to $1.5974.

UK Business Confidence Slumps

The UK business confidence fell to a 20-year low in August, the latest Business Trends report from accountants and business advisers BDO LLP showed today.

The Optimism Index, which predicts business performance two quarters ahead, suggests the economy will continue to contract at the start of 2013. The index fell to 89.1 in August from 93.1 in July. This is the sixth consecutive month that the data has registered a drop.

The Output Index, which predicts short-run turnover expectations, also fell sharply to 90.8 in August from 93.9 in July, reaching its lowest point for 40 months.

BP to Sell Non-Strategic Gulf of Mexico Assets

BP agreed to sell its interests in a number of oil and gas fields in the deepwater U.S. Gulf of Mexico to Plains Exploration and Production Company for $5.55 billion. The deal is expected to close by the end of 2012.

BP expects to divest assets with a total value of $38 billion between 2010 and 2013.

Gainers & Losers

Associated British Foods plc fell 2.1% to 1,279 pence after the food processor said the group''s second-half adjusted operating profit would be substantially ahead of last year, in line with expectations.

Dixons Retail plc surged 5% to 20.25 pence after the electrical retailer announced an invitation to holders to buy back for cash up to £80 million of its outstanding £300 million 6.125% of debt. Guaranteed Bonds due 2012 and up to £50 million of its outstanding £150 million 8.75% Guaranteed Notes due 2015.

Marks & Spencer Group plc, the retailer soared 3% to 371.90 pence on the speculation that the company may be exploring various leveraged transaction.

Royal Dutch Shell plc dipped 0.04% to 2,229.50 pence after the independent oil and gas explorer agreed to sell its 50% working interest in the Holstein Field to Plains Exploration & Production for approximately $560 million.