Stan Chart, Persimmons Earnings Lift Stocks

123jump.com Staff
26 Feb, 2008
New York City

UK stocks rallied after financial stocks recovered. Standard Chartered rose after reporting second half net income increased 23% to

[R]1:00PM New York, 6:00PM London – Standard Chartered second half profit rose 23% despite continued credit market turbulence. UK retailers survey show rising prices, the widest price rise across retailers since 1996.[/R]

Stocks in London rose despite Confederation of British Industries latest survey showed sales growth halted in February after prices rose sharply.

In London trading FTSE 100 stocks increased 1.47% or 87.9 to 6,087.40.

Of the 102 FTSE 100 index stocks, 77 rose and 25 declined. Alliance & Leicester led gainers in the FTSE 100 stocks with a rise of 8.11%.

Sales Growth Halts

The Confederation of British Industries reported today in the latest Distributive Trades Survey published on its web site that 36% of the respondents said sales volumes fell, while 34% said sales volumes rose from a year ago in February.

The resulting rounded balance of -3% was the first negative result since November 2006 (-9%) and disappointed retailer expectations (+10%). Retailers expect flat sales in the next month.

According to the survey, orders placed with suppliers fell marginally, while stock levels gained relative to expected demand but remained below their long-run average.

The prices of goods in the year to February increased at their fastest rate in over a decade, as many retailers felt the pressures of rising energy, food and raw material costs.

In addition, 55% of respondents said that average selling prices were up on a year ago, while 6% said they were down, which was the strongest since August 1996 when 51% respondents had raised prices. Prices are expected to rise in next survey as well.

Since November, retail sentiment has worsened, with a balance of 9% expecting deterioration in the overall business situation over the next three months.

Sales grew for grocers, where a balance of +30% reported year-on-year growth and for footwear shops and leather with a balance of +35%.

On the other hand, sales volumes fell markedly again on a year ago for durable household goods where a balance a balance of -70% reported declines.

Gainers & Losers

Alliance & Leicester led gainers in the FTSE 100 stocks with a rise of 8.11% followed by rises in Standard Chartered of 7.85%,in Standard Life of 6.13%, in Old Mutual Plc of 5.63%, and in Schroders Plc-NV of 4.78%.

Standard Chartered rose after reporting second half net income increased 23% to £1.44 billion from £1.18 billion a year earlier. In the period, Standard Chartered wrote down £300 million in losses.

Other financial stocks rose as well. Royal Bank of Scotland gained 4.16% and HBOS Plc surged 3.98%.

International Power Plc led the decliners in the FTSE 100 index stocks with a drop of 2.78% followed by losses in Centrica Plc of 1.67%, in Vedanta Resources of 1.57%, in Scottish & South of 1.34%, and in Rentokil Initial of 1.29%.

Retailers declined after CBI said retail sales growth halted in February as prices rose sharply. Next fell 1.03% and Marks & Spencer shed 0.55%.

Company News

U.K largest homebuilder Persimmon Plc reported today second half profit was flat at £216.9 million from £217.3 million a year earlier as fewer customers were discouraged by slowing house prices.

For the six months ended December 31st revenues declined 6% to £1.5 billion after people viewing show homes declined 13% this year. The stock closed down 0.39%