UK Home Prices Fall, Copper in London Rises

123jump.com Staff
30 Oct, 2008
New York City

UK home prices in October fell 14.6% from a year ago and dropped 1.4% from September on tight lending conditions and weak consumer confidence. Money market rates as measured by the libor rate fell 23 basis points to 3.2% after the U.S. Fed lowered the rate by 0.5%. Vedanta Resources surged 16%.

[R]2:00PM New York, 7:00PM London - U.K. house prices decline 14.6% to £158,872 in October.[/R]

Stocks in London gained 0.6% driven by commodity stocks as expectations heightened that demand for raw materials will rebound after central banks in the U.S., China, Hong Kong, Taiwan and Norway slashed their key interest rates.

However oil prices slumped below $70 per barrel.

In London trading FTSE 100 index rose 0.6% or 23.46 to 4,266.00.

Of the FTSE 100 index stocks 79 increased, 22 declined, and one was unchanged. Vedanta Resources led gainers in the index shares with a rise of 15.8% after copper futures rose 12.7% to $4,650 per metric ton.

U.K. House Prices Fall 14.6% to £158,872

Nationwide Building Society reported today that the country''s house prices dropped 1.4% from a month earlier and declined 14.6% from a year ago to £158,872 in October.

Completed house purchase transactions as a proportion of total stock mortgages has sunk to the lowest since 1974.

The report notes that the time taken to sell a property has increased 60% to 12 weeks from 7.4 weeks in the comparable period a year ago.

Bargains are driving the low levels of activity as “conditions are not yet very stressed”.

First time buyers are now 55% from the same period a year earlier.

The mortgage lender says the slowing economy will likely affect the home transaction volumes and the Bank of England will probably cut the benchmark interest rate by 50 basis points in November and December.

Nationwide chief economist Fionnuala Earley said, “A looming recession and continued financial market instability have uncomfortable implications for the housing and mortgage markets, and will undoubtedly affect the pace of recovery in house prices.""""

Money Market Rates Fall to 3.2%

The British Bankers Association reported today that the London interbank offered rate, or Libor, for dollar deposits fell by 23 basis points to 3.2% as the U.S. Federal Reserve cut its key rate by 50 basis points to 1%.

Hong Kong lowered its base rate to 1.5% from 2% today and Taiwan also followed suit. China slashed its benchmark rate by 0.27% yesterday.

In addition, the U.S. also unveiled swap arrangements with Mexico, Brazil, South Korea and Singapore through which it will pump $120 billion into the market to ease dollar lending conditions.

Gainers & Losers

Vedanta Resources led advancers in the FTSE 100 index shares with a rise of 15.8% followed by increases in Cairn Energy of 15.1%, in Amec Plc of 14.5%, in Petrofac Plc of 13.4% , and Kazakhmys of 12.2%.

Antofagasta soared 8.8%.

Admiral Group led decliners in the FTSE 100 index shares with a fall of 17.4% followed by losses in Stagecoach of 8%, in British America Tobacco of 7%, in First Group Plc of 6.1%, and Schroders Plc-NV of 5.7%.

Earnings Review

Royal Dutch Shell announced today that income attributable to shareholders in the third quarter ended September 30 gained 22% to $8.4 billion from $6.9 billion in the same period a year ago. Earnings per share climbed to $1.37 from $1.10 a year earlier.

Earnings in the period advanced 71% from a year ago to $10.9 billion.

However production of oil, gas and oil sands bitumen fell by 120,000 barrels of oil equivalent per day (boe/d) to 2.93 million of boe/d after the hurricanes in the Gulf of Mexico and a planned maintenance turnaround in the UK North Sea disrupted the operations.

Also liquefied natural gas sales volumes fell 6% from a year ago to 3.10 million tons.

AstraZeneca Plc said today net income in the three months to September 30 rose 28% to $1.73 billion from $1.34 billion a year ago.

Sales rose 9% to $7.7 billion from $7.1 billion from the comparable year ago period as sales in emerging markets gained 18% year-on-year to $1.1 billion. Sales in the U.S. remained unchanged.

The pharmaceutical company forecasted full year core earnings per share will increase to between $4.90 and $5.05 per share.