Retailers Lead, Producer Prices Rise 10%

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

UK stock indexes rose fractionally after Wolseley led retailers higher and crude oil prices fell despite the simmering conflict between Russian and Georgia. The conflict if widens may disrupt energy supplies in Europe. The conflict if widens may disrupt energy supplies to Germany and Italy. The producer price index rose 10% in the year to June. Ireland home prices fell 0.6% in June from May and fell 5% from a year ago.

[R]2:00PM New York, 7:00PM London - U.K. factory prices rise 10% in July but retail stocks gained in trading. BG discovers oil in North Sea.[/R]

London stock indexes rose fractionally after Wolseley led retailers higher and crude oil prices fell despite the simmering conflict between Russian and Georgia. The conflict if widens may disrupt energy supplies in Europe.

Market Sentiment

In London trading FTSE 100 rose 0.96% or 52.6 to 5,541.80.

Of the 102 FTSE 100 stocks 75 advanced, 25 declined, and 2 were unchanged. Wolseley led advancers in the index shares after oil prices traded below $116 per barrel.

Factory Prices Rise 10% in July

The Office of National Statistics reported on its Web site today that the output price index for home sales of manufactured products jumped 10% in the year to June.

Also unadjusted the index increased 0.4% on increases in petroleum and chemical products, while the output price index, excluding excise duties, advanced 10.9% in the year to July.

The output price index excluding food, beverages, tobacco and petroleum gained 6.7% in the year to July and increased 0.3% in seasonally adjusted terms between June and July.

According to ONS, the input price index for materials and fuels that were purchased by manufactures jumped 30.1% in the year to July and spiked 0.2% between June and July on rising crude oil prices.

The report notes that the prices of imported materials as a whole edged up 0.3% between June and July, while seasonally adjusted the input price index shed 0.6 % between June and July.

In addition, the input price index for manufacturing industry excluding food, beverages, tobacco and petroleum industries increased 16.6% in the year to July.

Ireland House Prices Fall 0.6% in June

Irish Life & Permanent reported on its Web site today that permanent tsb/ESRI House Price Index show that the average national house prices slumped 0.6% in June from 1.2% in May in Ireland.

Average national prices dropped 5% in the first six months of the year compared with 2.6% in the same period a year earlier, while average price paid for a house across the nation in June 2008 declined to 273,392 euros from 287,887 euros in December 2007 and 302,605 euros registered in June a year ago.

Observed Niall O’Grady, General Manager Business Strategy, permanent tsb said, “Price reductions are continuing nationally and while there have been reductions in all segments of the market, the sharper fall in the price of new houses reflects a more aggressive approach by developers in order to stimulate some market demand.”

Gainers & Losers

Wolseley led advancers in the FTSE 100 index shares with a rise of 13.43% followed by increases in ITV Plc of 6.25%, in Marks & Spencer of 5.92%, in Carphone Warehouse of 5.34%, and Next Plc of 4.81%.

Wolseley and other retailers increased after oil prices declined to around $116 per barrel with gains in Next Plc of 4.81%, in Kingfisher Plc of 3.89%, and Tesco Plc of 2.39%.

Ferrexpo led decliners in the FTSE 100 index shares with a fall of 5.06% followed by losses in Eurasian Natural of 5.69%, in Petrofac of 3.65%, in Rio Tinto of 2.03%, and Vedanta Resources of 1.98%.

Commodity stocks fell on falling oil prices. BHP Billiton shed 1.52%, Kazakhmys slumped 1.12%, and Antofagasta slipped 1.11%.

BG Norge Discovers Oil in North Sea

The Norwegian Petroleum Directorate reported on its Web site today that BG Norge AS has discovered oil in the North Sea and is completing exploration well 34/3-1 S also in the North Sea.

The Directorate added that a comprehensive data acquisition programme has been carried out and the resource potential will now be evaluated with a side-track.

Kazakhmys Ups Stake in Eurasian Natural to 25%

Kazakhmys reported that it has acquired an additional 35,733,717 shares in Eurasian Natural Resource Corporation at an average price of 1126 pence per share, increasing its holdings in the company to 322,177,851 shares or 25.02% of the issued share capital.

CEO of the company Oleg Novachuk said the recent decline in stocks had enabled the company to increase its stake in the company to become the single largest shareholder.

Europe Markets Review

In London FTSE 100 Index closed higher 52.60 or 0.96% to 5,541.80, in Paris CAC 40 Index increased 46.64 or 1.04% to close at 4,538.49 and in Frankfurt DAX index higher 47.98 or 0.73% to close at 6,609.63. In Zurich trading SMI increased 75.63 or 1.04% to close at 7,337.73.