UK Output increases, Confidence Dips

123jump.com Staff
09 Apr, 2008
New York City

UK manufacturing index rose in the first quarter but consumer confidence in March fell. The International Monetary Fund lowered the growth estimate for UK to 1.6% from 1.8% for the current year. ONS reported first quarter total output rose 0.4% on the rise of 0.3% in manufacturing. Cairn Energy led gainers in the FTSE 100 index shares with a rise of 4.5% followed by increases in BG Group of 3.4%, in Vedanta Resources of 3%, in BHP Billiton of 2.4%, and Anglo American of 2.3%.

[R]1:00PM New York, 5:00 PM London - U.K. manufacturing index unexpectedly rises in February but consumer confidence in March declines.[/R]

Market sentiment

In London trading FTSE 100 stocks fell 0.11% or 6.3 to 5,983.90.

Of the 102 stocks in FTSE 100 index 28 rose and 74 declined. Cairn Energy led advancers in the index with a rise of 4.48% followed by a rise in BG Group of 3.34%.

IMF cuts U.K growth forecast

The IMF in its World Economic Outlook slashed its UK growth forecast for the current fiscal year to 1.6% from earlier projection of 1.8%.

U.K. consumer confidence remains low

Nationwide Building Society reported today on its Web site that the Nationwide Consumer Confidence Index eased 1 point from February to 77 in March, reflecting “weakening house price growth and ongoing uncertainty in the financial markets”.

The Present Situation Index, which measures consumer sentiment about the current economic and employment situation, declined by two points to 74 in March from 76 in February as there was a downward shift in consumer perceptions of the current employment situation.

However the Expectations Index, which gauges how consumers feel about the economic and employment situation and their income in six months time, remained unchanged for the third straight time at 79.

Also the Spending Index, a measure that shows consumer sentiment about spending on household goods and major purchases, increased from 64 to 67 in March, due to an improvement in consumer sentiment regarding large ticket items such as a car or a house.

The report also noted that consumer expects that prices will increase 0.4% over the next six months. In February, consumers expected prices to decline 1.1% over the period.

U.K. manufacturing unexpectedly rises

The Office of National Statistics reported today that between January and February output of the manufacturing industries rose by 0.4%.

There were no significant increases but the largest marginal increases were in food, drink and tobacco industries, with increase of 0.5%. In the latest three months, manufacturing output increased by 0.3%.

Output of the electricity, gas and water supply industries increased by 0.3% but mining and quarrying output fell by 3.0% compared with the previous three months.

Gainers & Losers

Cairn Energy led gainers in the FTSE 100 index shares with a rise of 4.48% followed by increases in BG Group of 3.34%, in Vedanta Resources of 2.78%, in BHP Billiton Plc of 2.38%, and Anglo America Plc of 2.31%.

Commodity stocks gained after oil traded near $109 per barrel ahead of the release of the U.S. weekly inventories data.

Gold prices also consolidated above $900 level per troy ounce.

Other commodity stocks rose as well. Rio Tinto edged up 1.68%, BP advanced 1.58% and Antofagasta Plc increased 1.42%.

Admiral Corp led decliners in the FTSE index shares with a drop of 4.59% followed by losses in Standard Life of 4.43%, in HBOS Plc of 4.19%, in Old Mutual Plc of 4.04%, and British Airways of 3.89%.

Realty stocks fell as well. British Land Co. shed 3.30% and Home Retail Group shed 2.17%.

World markets

In Tokyo Nikkei 225 Index closed lower 138.54 or 1.05% to 13,111.89, in Hong Kong Hang Seng index decreased 327.12 or 1.35% closed to 23,984.57. In Australia ASX 200 index lower 51.30 or 0.92% to close 5,520.20. In Malaysia KL Composite index increased 2.03 or 0.17% closed to 1,227.74.

In Thailand SET index closed lower 0.66 or 0.08% to 826.19 and Indonesia JSE Index edged decreased 69.68 or 3.10% to 2,180.09. Sensex index in India increased 202.89 or 1.30% to 15,790.51. Market of South Korea was closed today.

In London FTSE 100 Index closed lower 6.30 or 0.11% to 5,983.90, in Paris CAC 40 Index decreased 37.72 or 0.77% to close at 4,874.97 and in Frankfurt DAX index lower 50.62 or 0.75% to close at 6,721.36. In Zurich trading SMI decreased 165.06 or 2.18% to close at 7,403.08.