UK Deficit Soars; Wm Morrison Up, Playtech Drops

Trupti Mehta
21 Jul, 2009
New York City

The UK government budget deficit jumps to 32-year record of

[R]7:00 PM London, 2:00 PM New York – The UK government budget deficit jumps to 32-year record of £9.9 billion or 56.6% of GDP. Ryan Air plans to trim capacity at its hub in London Stansted airport. William Morrison surged after it lifted earnings outlook.[/R]

The Office of National Statistics said government budget deficit in June increased to £9.9 billion compared to £5.8 billion a year ago on higher social spending. The government borrowing in the month increased to £13 billion compared to £7.5 billion a year ago month.

The government debt as percentage of GDP surged from 44% in June of last year to 56.6% or £798.8 billion, record high in 32 years. The data does not include the full impact of the financial markets intervention in nationalizing banks.

Ryan Air Chief Executive Michael O’Leary said at a press conference that reduced flight schedule at London Stansted airport will impact 2,500 jobs at the airline and suppliers. The airline will assign 24 aircrafts in the season compared to 28 a year ago and 40 this summer season.

The discount airline expects to fly 17% fewer passenger or 12.5 million in the season.

Gainers & Losers

In London FTSE 100 Index closed higher 37.55 or 0.85% to 4,481.17.

Wm Morrison Supermarkets increased 8.2% to 274 pence after it indicated that full year earnings are expected to be better than expected earlier. The company said that the plans to lower costs are on target and the retailer continues to attract new customers.

Tesco increased 1.4% to 375 pence and J Sainsbury added 3% to 326 pence.

Next, the apparel retailer decreased 1.6% to 1,618 pence after it reported sales in the first twenty five weeks increased 1.4% on same store sales decline of 1.9%. The company guided weak outlook for the second half.

Advanced Power Components plunged 22.4% to 11.25 pence after it estimated annual pre-tax loss of £0.5 million.

Aukett Fitzroy Robinson Group dropped 22.2% to 3.50 pence estimated lower annual revenues for the period ending in September on weakness in its Russian projects.

Severn Trent increased 0.45 to 1,092 pence after it reiterated its revenues and earnings outlook and estimated slightly lower revenue in the current fiscal year.

The pub operator Fuller’s said like-for-like sales for the sixteen weeks ending on July 18 increased 2.9% and but expects profits at the locations to decreased 1%.

Playtech plunged 24% to 343 pence after it said its gross income in the second quarter will be lower than in the first quarter. William Hill and 888 Holdings decreased 4%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 76 increased, 24 declined and 2 were unchanged.

TUI Travel Plc decliners in the FTSE 100 index with a loss of 2.60% followed by losses in Friends Provident Plc of 2.50%, in Kingfisher Plc of 2.17%, in Scottish and Southern Energy Plc of 2.02%, in Man Group Plc of 2.01%.

Wm Morrison Supermarkets Plc led gainers in the FTSE 100 index with a rise of 8.19% followed by increase in Hammerson Plc of 4.50%, in Legal & General Group Plc of 4.27%, in Anglo American Plc of 4.11%, in Fresnillo Plc of 4.01%.

Europe Markets Review

In London FTSE 100 Index closed higher 37.55 or 0.85% to 4,481.17, in Paris CAC 40 Index increased 31.95 or 0.98% to close at 3,302.89 and in Frankfurt DAX index higher 63.82 or 1.27% to close at 5,093.97. In Zurich trading SMI increased 8.26 or 0.15% to close at 5,636.19.