UK Stocks Climb Led by Banks

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

Banks drove U.K. stocks higher after JP Morgan Chase said losses in the credit market are expected to ease. Bradford & Bingley climbed 27% on speculation that it is a takeover target. London Stock Exchange Group climbed after reporting sales above estimates. Barclays advanced 5.1% to 293.25 pence, while Royal Bank of Scotland increased 4%.

[R]1:00PM New York, 6:00PM London - U.K. house prices decline 0.9% in June.[/R]

London market averages rallied despite a report that showed house prices fell in June as commodity stocks and homebuilders advanced on rising metal prices.

Market Sentiment

In London trading FTSE 100 rose 1.64% or 89.1 at 5,529.60.

Of the 102 FTSE 100 stocks 79 rose, 21 declined and 2 were unchanged. London Stock Exchange led advancers in the index shares with a rise of 10.28% after reporting today that sales in the first quarter ended June 30 increased 8% to£178 million.

UK House Prices Fall 0.9% in June

Nationwide Building Society reported on its Web site today that U.K. house prices fell 0.9% at £172,415 in June from a fall of 2.5% or £173,583 in May.

Prices are now 6.3% lower than this time last year, but remain 4% higher than 2 years ago. Also house purchase transactions remain subdued.

According to the mortgage lender, the tightening of credit conditions over previous months coupled with changing expectations of house price growth and weakening consumer confidence has negatively affected mortgage demand and consequently led to slowing housing market activity.

Nationwide''s Chief Economist Fionnuala Earley said: “In the most recent cycle the number of house purchase approvals began to moderate in the first quarter of 2007, whereas annual house price growth did not begin to slow until the third quarter. The number of house purchase approvals per month is now at historic lows and in May was running at less than half of its long run average rate.”

LSE Sales Rise 8%

London Stock Exchange reported on its Web site today in its interim management statement that that revenue for the first ended 30 June 2008 increased 8% to£178 million as the primary market remained active.

During the period, there were 73 equity new issues in the period, of which 33 new issues where on the Main Market and 3 new issues in Italy.

On the overall, £34 billion was raised on the Exchange markets during the quarter.

However, the value traded on combined cash equities markets fell 8%, with trades per day and equities order book trading on Borsa Italiana plummeting 12% to 263,000.

Total terminals taking real time London Stock Exchange data rose 19,000 since the first quarter last year to 139,000 at end of June 2008, including a 13,000 rise in the number of professional terminals, while professional users of Borsa Italiana’s DDM market data service rose by 6,000 to 161,000.

London Stock Exchange chief executive Clara Furse, Chief Executive said the integration synergies for the establishment of a one-stop shop for intermediaries and investors is well on track and “we are developing all aspects of our business, services and technology to meet the challenges and realise the opportunities available to us in a changing global industry”.

Gainers & Losers

London Stock Exchange led advancers in the FTSE 100 index shares with a rise of 10.28% followed by increases in Carphone Warehouse of 7.96%, in ITV of 7.23%, in Lloyds TSB Group of 6.65%, and Wolseley of 6.46%.

London Stock Exchange increased as sales rose 8% to £178 million as the primary market remained active.

Commodity stocks rose as metal prices advanced and oil prices rose to $138.60 a barrel after Iran test fired missiles. Xstrata edged up 5.06% and Kazakhmys spiked 4.04%.

Homebuilders gained as well. Hammerson jumped 4.64% and British Land Co. climbed 4.87%.

Wood Group led decliners in the FTSE 100 index shares with a drop of 2.67% followed by losses in Thomas Cook Group of 1.94%, in International Power Plc of 1.76%, in Petrofac Ltd of 1.76% and British Energy of 1.51%.