Faster Economic Growth Lifts UK Stocks

123jump.com Staff
20 Dec, 2007
New York City

UK economy in the third quarter expanded by 0.7% lower than 0.8% expansion in the second quarter. The UK economy has expande at 3.3% from the third quarter of the last year on steady growth in business and financial services. Household expenditures and construction were the contributors to the economic expansion. Johnson Matthey soared as high as 19% on the speculation that Dow Chemical will make a bid for the company. UK anti-trust regulator said that BSkyB should reduce its stake in ITV.

[R]7:00PM London, 2:00PM New York – UK stocks jumped after the third quarter economic report showed faster than anticipated growth.[/R]

In London FTSE 100 Index closed up by 61.10 or 0.97% to 6,345.60 after the third quarter economic growth report from the Office of National Statistics.

In the third quarter the economy expanded at 3.3% surprising most economists.

Johnson Matthey Plc jumped 5.3% to close at 1,836p after investors speculated that Dow Chemical Company will make an offer for the catalytic converter company. Johnson Matthey stock rose as high as 19% in early session.

Of the stocks in the FTSE 100 index, 75 rose, 26, declined, and 1 was unchanged. Tullow Oil led the decliners in the index with a fall of 3.1% followed by losses in British Energy of 1.8%, in Persimmon of 1.6%, in Experian Group of 1.5%, and in Barratt Development of 1.4%.

Centrica, British Sky Broadcasting, Anglo American, and Alliance Leicester fell more than 1%.

UK antitrust authority the Competition Commission ruled that British Sky Broadcasting must reduce its stake in the local broadcaster ITV Plc. The ruling lifted ITV stock and opened the gateway for other bidders to bid for ITV.

Johnson Matthey led the gainers with a rise of 5.4% followed by increases in British American Tobacco of 3.5%, in DSG International of 3.5%, Compass Group of 3.1%, and in WPP Group of 3%.

Royal Dutch Shell, Imperial Tobacco, Tesco, and BAE Systems added more than 2%.

Royal Dutch Shell jumped after an agreement with China National Petroleum Corporation for oil exploration in the Chinese region.

Keller Group added 3% to 661p after it said that it will beat the annual earnings estimates on higher demand for its services.

Inspace Plc surged 7% to 177p after it reached agreement with Willmott Dixon for a cash buyout offer of 183p per share.

WPP Group jumped 3% to 630p after it acquired California based Hispanic market research firm Cheskin. The firm will be integrated with the Added Value, research arm of WPP, and will provide product and market development to technology and consumer products companies.

In other European markets CAC 40 Index in Paris increased 14.03 or 0.26% to close at 5,511.45, and in Frankfurt DAX index increased 31.87 or 0.38% to close at 7,869.19. In Zurich trading SMI closed up 7.88 or 0.09% to close at 8,402.84.