Lenders HBOS, RBS Plunge

123jump.com Staff
11 Jun, 2008
New York City

UK stocks declined after unemployment rate increased in May to 5.3%. The statistical office, ONS noted that the working age employment rate was 74.9% in the three months to April 2008, unchanged from the three months to January 2008 but up 0.5 percentage points from a year earlier. HBOS Plc led decliners in the FTSE 100 index shares with a drop of 12% followed by losses in Royal Bank of Scotland of 9%.

[R]1:00PM New York, 5:00PM London - UK unemployment claims increase in May. Stocsk in London fell.[/R]

Market sentiment

In London trading FTSE 100 index fell 1.78% or 104 at 5,723.30. Of the 102 FTSE 100 stocks 13 gained, 88 declined, and 1 was unchanged. Capita Group led advancers in the index shares with a rise of 3%.

UK unemployment claims increase in May

The Office of National Statistics reported today on its website that the number of unemployed people, the unemployment rate and the claimant count have all increased in May.

In the latest reference period, the working age employment rate was unchanged from the previous quarter ended January at 74.9%. According to the statistics office, the number of people in employment increased by 76,000 over the quarter, while the unemployment rate grew 0.1 percentage point at 5.3%.

In addition, the number of unemployed people increased by 38,000 over the quarter and the claimant count increased 9,000 from the previous quarter to January to 819,300. Also the number of vacancies was essentially unchanged from a quarter ago at 678,600.

The ONS noted that the working age employment rate was 74.9% in the three months to April 2008, unchanged from the three months to January 2008 but up 0.5 percentage points from a year earlier.

The employment level rose 76,000 from the quarter to January at 29.55 million in the three months to April 2008. Also total hours worked per week increased 6.3 million in the three months to January at 943.7 million in the quarter to April 2008.

London Financial Services vacancies fall by 17%

Morgan McKinley reported today on its website that London’s financial services hiring market registered a 17% decrease in May in the number of new vacancies compared with a year ago, while there was also 8% drop in new job opportunities from the previous month.

The report notes that for the fifth straight month the number of individuals looking for new jobs outweighed the number of new jobs in the City. Candidate flow increased 9% during May compared with the previous year.

Also the average City salary fell 5% to £48,347 during May compared with the same month the previous year, and plunged 1% from the month earlier.

Robert Thesiger, CEO of Morgan McKinley’s parent company, Imprint said, “The increase in available talent means employers have a greater pool of choice when filling roles. This is driving wage inflation down when compared with last year and indicates a continuation of challenging circumstances in London’s financial services industry.”

Gainers & Losers

Capita Group led advancers in the FTSE 100 index shares with a rise of 3% followed by rises in Centrica Plc of 2.95%, in First Group Plc of 2.49%, in Amec Plc of 2.18%, and British Energy of 1.78%.

HBOS Plc led decliners in the FTSE 100 index shares with a drop of 11.64% followed by losses in Royal Bank of Scotland of 9%, in Alliance & Leicester 8.41%, in Next Plc of 7.38%, and Kazakhmys Plc of 6.85%.

Other financial stocks fell as well. Standard Chartered edged down 6.78% and Barclays fell 4.67%.

World markets review

European stocks traded mixed at mid-day on rising inflation in France and current account deficit in EU27.

The CAC 40 gained 0.43% in midday to 4,781.62. In Germany the DAX 30-index advanced 17.23 points or 0.25% to 6,788.33. Stocks in Switzerland fell as the Swiss Market index retreated 36.27 points or 0.50% to 7,247.94. The FTSE 100 gained 3.20 points or 0.05% to 5,830.50.

In Tokyo Nikkei 225 Index closed higher 162.31 or 1.16% to 14,183.48, in Hong Kong Hang Seng index decreased 47.92 or 0.21% closed to 23,327.60. In Australia ASX 200 index higher 29.80 or 0.55% to close 5,467.30. In Malaysia KL Composite index decreased 1.68 or 0.14% closed to 1,229.28.

In South Korea Kospi Index increased 7.29 or 0.41% to close at 1,781.67, in Thailand SET index closed lower 0.28 or 0.04% to 791.66 and Indonesia JSE Index edged increased 0.97 or 0.04% to 2,374.78. Sensex index in India increased 296.07 or 1.99% to 15,185.32.