UK Home Possessions Surge

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

UK stocks fell after home repossessions surged, but from a low level in many parts of the island nation. The FTSE 100 index fell 1.05% to 6,204 on weakness in mining, financials and home builder stocks. Crude oil in London and New York trading rose to new intra-day high above $126 a barrel. Experian Group led gainers in the FTSE 100 index with a rise of 3.5% and Carphone Warehouse led decliners with a fall of 7.3%.

[R]1:00 AM New York, 5:00PM London - U.K. stocks fell after repossession of homes rose and crude oil reached a new high.[/R]

Stocks in London fell after a government report showed that home repossession claims, which usually pre-empt foreclosures, rose in the first quarter. Also an independent report showed that U.K home prices slumped 0.2% in April.

In London trading FTSE 100 fell 1.05% or 66.1 at 6,204.70. Of the 102 FTSE 100 stocks 21 gained and 881 declined. Experian Group led advancers in the index shares with a rise of 3.50% followed by Whitbread increasing 1.68%.

Crude oil prices increase above $126 per barrel

Crude oil prices rose to a record $126 a barrel, further putting pressure on Opec to increase output. Speculators drove prices higher on continued disturbances in Nigeria. Opecs’ secretary general Abdalla El-Badri yesterday said the cartel will not increase its output despite rising prices.

Nymex June West Texas Intermediate oil increased 1.8% to an intraday record of $126.20 a barrel. Diesel in Europe gained 2.7% to $1,187 a ton, as demand for the fuel for electricity in China, South Africa and Chile drive the demand.

Weak dollar and expectations of further weakness continue to drive investors away from the U.S. dollar into commodities including metals, agro products and energy products.

U.K. home repossession claims increase in first quarter

U.K home repossession claims-first step to foreclosures- by mortgage lenders gained 16% from a year earlier to 38,688 in the first quarter, while repossession orders issued by courts gained 17% from a year earlier to 27,530. Ministry of Justice said home possessions orders are the first step in foreclosure rose as borrowers face rising debts.

Repossessions jumped to fifteen year high, but are still at one-third level reached last in the early nineties. Properties in possessions reached at their peaks to 75,540 in 1991 and were at their lows of 8,200 in 2004.

Claims in Evesham rose by 167% and increased by 11% in Shrewsbury and by 84 % in Melton Mowbray. Repossessions surged 79% in Altrincham near Manchester; by 61% in Southport near Liverpool and by 64% in Rotherham near Sheffield.

Gainers & Losers

Experian Group led advancers in the FTSE 100 index shares with a rise of 3.50% followed by increases in Whitbread of 1.68%, in Eurasian Natural of 1.48%, in Unilever Plc of 1.31%, and BAE Systems Plc of 1.27%.

Carphone Warehouse led decliners in the FTSE 100 index shares with a drop of 7.3% followed by losses in Kazakhmys of 6.7%, in Sage Group of 5.6%, in Persimmon of 5.6%, and Home Retail Group of 5.4%.

World markets review

In Tokyo Nikkei 225 Index closed lower 287.92 or 2.06% to 13,655.34, in Hong Kong Hang Seng index decreased 386.62 or 1.52% closed to 25,063.17. In Australia ASX 200 index higher 48.60 or 0.85% to close 5,771.80. In Malaysia KL Composite index increased 4.92 or 0.38% closed to 1,285.27.

In South Korea Kospi Index decreased 24.30 or 1.31% to close at 1,823.70, in Thailand SET index closed lower 3.46 or 0.41% to 846.71 and Indonesia JSE Index edged decreased 1.91 or 0.08% to 2,375.03. Sensex index in India decreased 343.58 or 2.01% to 16,737.07.

In London FTSE 100 Index closed lower 66.10 or 1.05% to 6,204.70, in Paris CAC 40 Index decreased 95.02 or 1.88% to close at 4,960.56 and in Frankfurt DAX index lower 68.73 or 0.97% to close at 7,003.17. In Zurich trading SMI decreased 102.18 or 1.35% to close at 7,483.97.