UK Stocks Soar 4%; Marks & Spencer Earnings

123jump.com Staff
04 Nov, 2008
New York City

The UK stocks surged after the retailer Marks & Spencer reported better than expected earnings and crude oil futures prices rose. Miners and energy stocks rose after a rise in copper and oil prices. Kazakhmys led advancers in the FTSE 100 index shares with a rise of 17.6%.

[R]1:00PM New York, 6:00PM London – UK stocks surged after the retailer Marks & Spencer reported better than expected earnings and crude oil futures prices rose.[/R]

London stock indices surged after Marks& Spencer reported a less-than forecasted drop in profit in the first half to September.

Commodity stocks also rose as crude oil prices gained to $66 per barrel after Saudi Arabia cut its production.

In London trading FTSE 100 increased 4.4% or 196.22 to 4,639.50.

Of the FTSE 100 stocks 93 rose, 8 declined, and one was unchanged. Kazakhmys led advancers in the index shares as copper prices rose 1.1% and crude oil prices jumped above $66 per barrel.

Marks & Spencer Profit Falls Less than Forecasted

Marks & Spencer first half profit in the period ended September 27 declined to £223.2 million from £393.2 million a year ago beating the analysts’ forecasts of £213 million according to a survey of three analysts conducted by 123jump.com.

Operating profit declined to £372.4 million from £488 million a year ago but the dividend was maintained at 8.3 pence per share.

The retailer noted that consumer confidence and sales fell in the review period.

Marks & Spencer''s clothing market share stood at 10.9%, while the food business market share fell from 4.3% to 4%.

For the Drive International business, 25 new stores were opened during the period and space increased by 2.8% to 2.95 million square feet. The brand was also developed in India and China.

Net debt level stood at £3.1 billion in the first half.

Marks & Spencer said in a statement, “Trading throughout October has been volatile with recent events in the financial markets and their impact on the wider economy further weakening consumer sentiment. We remain cautious about the outlook for the remainder of the year.""

Third quarter sales will be announced on January 7, 2009.

RBS £1 billion Write-down in October

Royal Bank of Scotland finance director Guy Whittacker said the lender wrote down £1 billion in assets linked to Lehman Brothers Holdings and Icelandic banks, according to the Bloomberg News.

RBS noted that although it was hit by £1.4 billion markdowns before accounting adjustments in the third quarter, credit related losses might be higher in the fourth quarter.

Analysts estimate that the company will record a loss for 2008.

Gainers & Losers

Kazakhmys led advancers in the FTSE 100 index shares with a rise of 17.6% followed by gains in Wood Group of 17.4%, in London Stock Exchange of 16.9%, in Eurasian Natural of 16.8%, and Prudential Plc of 16.3%.

Kazakhmys rose after copper prices gained 1.1% and oil prices advanced 3.9% to $66.41 per barrel. Xstrata advanced 12% and Vedanta Resources soared 9.6%.

Stagecoach Group led decliners in the FTSE 100 index shares with a fall of 5.6%, in Associated British Food of 1.3%, in Cadbury Plc of 0.7%, in Sage Group of 0.6%, and WM Morrison Sup of 0.6%.

Europe Markets Review

In London FTSE 100 Index closed higher 196.22 or 4.42% to 4,639.50, in Paris CAC 40 Index increased 163.12 or 4.62% to close at 3,691.09 and in Frankfurt DAX index higher 251.20 or 5.00% to close at 5,278.04. In Zurich trading SMI increased 166.10 or 2.66% to close at 6,399.98.