London Stocks Rise, Energy Stocks Up

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

UK stocks rose despite the European Union economies shrank for the second quarter in a row. Germany led the region with the sharpest decline followed by shrinks in Italy and Ireland. Stocks in London rose 1.5%. Energy stocks lead the gainers. Luxury home prices in London on the decline.

[R]1:00PM New York, 7:00PM London - Bargain hunting lifts London stocks. Euro area enters into a recession.[/R]

European Union economy shrank for the second quarter in a row. GDP in the third quarter shrank at 0.2% matching the decline in the second quarter. The latest data from the Eurostat, the statistical agency for the 15-member nations showed that several economies are shrinking in many nations in the union.

Germany led the countries in the region with a shrink of 0.5% followed by second quarterly declines in Italy and Ireland. Spain GDP declined for the first time this quarter.

Hong Kong, the first nation in Asia reported two consecutive quarterly declines in economic growths.

The third quarter GDP in Hong Kong GDP 0.5% after declining 1.4% in the second quarter. However, in the third quarter economy grew at 1.4% from a year ago quarter.

The U.S. retail sales were down in October as consumer keep tight grip on wallets and worry about their jobs. October retail sales dropped 2.8% from September and declined 4.1% from a year ago. The revised sales in the last three months ending in September declined 1.3%.

In London trading FTSE 100 rose 1.5% or 63.76 to 4,232.97.

Of the FTSE 100 index shares 64 increased, 36 declined, and 2 were unchanged. Man Group led advancers in the index shares with a rise of 7.7%.

Luxury Homes Prices to Fall 14% in 2009

Savills Plc reported today that luxury home prices in London may decline 14% in 2009 if global financial markets conditions deteriorate.

The total two-year drop in luxury home prices may fall as much as 30% on job cuts and potential cuts at financial institutions up from previous estimate of 25%.

Prices of apartments and houses fetching £1 million are projected to depreciate by 20% this year, and are expected to fall at a faster rate than general real estate market.

Savills says luxury home prices will rise 6% in 2010, while home prices valued at £1 million at the end of 2007 will recover the value they had six years earlier by 2013.

Prime London home prices are forecasted to increase 15% in 2011 and 10% in 2012.

South East England, Scotland, East Anglia and London will be the first to recover in 2012 or 2013.

European Union Economies Face Recession

Eurostat, the statistical office of the European Communities, said the euro areas’ gross domestic product fell 0.2% in the third quarter, falling for the second straight month.

Second quarter economic growth rate fell 0.2% in the euro area and was flat in the EU27.

However, seasonally adjusted GDP rose by 0.7% in the euro area and by 0.8% in the EU27 in the third quarter of 2008 and gained 1.4% and 0.7% correspondingly in the second quarter.

Gainers & Losers

Man Group led gainers in the FTSE 100 index shares with a rise of 7.7% followed by increases in Prudential Plc of 7.6%, in Standard Chartered of 6.4%, in Cairn Energy of 5.3%, and TUI Travel of 5.2%.

Vedanta Resources led decliners in the FTSE 100 index shares with a drop of 7.9% followed by losses in ICAP Plc of 6.8%, in HBOS Plc of 3.9%, in Marks & Spencer of 3.8%, and Rexam of 3.6%.

Commodity stocks fell after copper and crude oil prices declined. Copper fell $1.7125 per ton and crude oil slid $2 to $56 per barrel. BHP plunged 2.3% as a result.

Retailers fell as U.S. retail sales fell the most since 1992. Next Plc shed 1.9% as a result.

Europe Markets Review

In London FTSE 100 Index closed higher 66.07 or 1.58% to 4,235.28, in Paris CAC 40 Index increased 31.33 or 0.96% to close at 3,300.79 and in Frankfurt DAX index higher 84.71 or 1.82% to close at 4,734.23. In Zurich trading SMI increased 98.53 or 1.72% to close at 5,838.57.