UK Home Loans Decline, Stocks Fall

123jump.com Staff
23 Sep, 2008
New York City

UK investors are increasingly worried about the global economic health and its impact on the UK traded companies. Financials declined as the U.S. lawmakers debated the size and nature of the bailout plan. Metal and crude oil prices dropped and dragged down mining companies.

[R]1:00PM New York, 6:00PM London - U.K. approvals for house purchase drops 64% in August. Weak miners and financials drag the benchmark index lower.[/R]

London stock indexes slumped led by financial and commodity stocks on rising worries over the health of the world economy.

Market Sentiment

In London trading FTSE 100 fell 1.91% or 100.14 to 5,136.12.

Of the stocks in the FTSE 100 index 16 rose, 85 declined, and 1 was unchanged. Hammerson led advancers in the index shares with a rise of 2.43% followed by Unilever increasing 2.41%.

U.K Approvals For House Purchase Falls 64%

The British Bankers Association reported today that the approval for home purchases slumped 64% to 21,086 in August from the same period a year ago, while approvals for remortgaging slid 28% than a year ago in the review period. Also, approvals for equity withdrawal and other purchases fell 35% from a year ago.

The BBA noted that net mortgage lending rose by £2.1 billion in August, which is less than half the average rise over the previous six months. In addition the annual growth rate declined from 12.0% to 11.4%.

On the overall, gross lending in the month was 5% lower than in July and 27% lower than a year ago. Annual growth in credit card borrowing surged from 7% to 8.2% and borrowing on overdraft fell slightly and gross unsecured loans remained subdued.

According to the BBA, personal deposits rose £300 million in August after a marginal slump in July.

BBA statistics director David Dooks commented, “The low number of mortgage approvals in previous months predicted lower gross lending in August and, together with remortgaging, a much weaker net lending figure than of late resulted.

Falling property prices, economic pressures on households, tighter lending criteria and anticipation of the Government''s announcement on stamp duty all suppressed or delayed demand in August and will continue having an impact in the months ahead.”

Judge Rejects Tate & Lyle Infringement Case

Tate & Lyle Plc reported on its Web site yesterday that an Administrative Law Judge at the U.S. International Trade Commission (“ITC”) in Washington D.C. rejected the company’s claims in the patent infringement case against certain manufacturers and importers of Chinese sucralose.

A “binding final determination” by the full six-person Commission is expected by January 2009.

Gainers & Losers

Hammerson led advancers in the FTSE 100 index shares with a rise of 2.43% followed by increases in Unilever of 2.41%, in International Power of 2.39%, in British land Co. of 1.81%, and Imperial Tobacco of 1.62%.

HBOS Plc led decliners in the FTSE 100 stocks with a fall of 13.78% followed by losses in Eurasian Natural of 11.44%,in Vedanta Resources of 10.39%, in Anglo America of 8.21%, and Man Group Plc of 8.19%.

HBOS and other financial stocks declined on mounting worries that the $700 billion bailout will not be enough to avert a recession in the U.S. Royal Bank of Scotland and Lloyds TSB Group fell 5.90% and 4.82% respectively.

Commodity stocks also fell. Xstrata dropped 7.72% and Kazakhmys slumped 6.58%.