UK Stocks Rebound, Weak Production

123jump.com Staff
10 Mar, 2009
New York City

London market averages closed higher and government report that showed industrial production fell in three months to January. Insurance and bank stocks closed higher as bargain hunters braved in the sector. HSBC surged 14% Friends Provident soared 21%.

[R]1:00PM New York, 6:00PM London - U.K. industrial production falls 5.6% in three months to January.[/R]

London market averages closed higher and government report that showed industrial production fell in January.

In London trading FTSE 100 index gained 4.9% or 172.83 to 3,715.23.

Of the FTSE 100 index stocks, 100 increased, 2 fell and one was unchanged. ICAP Plc led gainers in the index shares with a rise of 20.7% followed by Friends Provident increasing 20.6%.

Industrial Output Drops 5.6% in January

Office of National Statistics reported today that the UK industrial production fell 5.6% in the three months ended January in seasonally adjusted terms and fell 9.6% from the same period a year ago.

Manufacturing output declined 6.4% in the three months ending in January mining and quarrying output fell 3.1% and output of the electricity, gas and water supply industries tumbled 1% from the previous three months.

The ONS said manufacturing output slipped 2.9% in January from a month ago led by declines of 10% in the transport equipment industries, 6.1% in the electrical and optical equipment industries and 7% in the machinery and equipment industries.

However output increased 0.9% in the food, drink and tobacco industries.

In addition, output of electricity, gas and water supply industries dropped 1% in the three months to January from the previous quarter but remained flat between December and January.

Output of the consumer durable goods industries fell by 8.9% from the previous quarter and dropped 15.3% from the comparable year ago period and output in the consumer non-durable goods industries shed 2.5% in the January quarter from the previous three months.

The report notes that of the capital goods industries plunged 7.4% compared with the previous three months and plummeted 12% than the same period a year ago.

Output in the intermediate goods and energy industries fell 6.3% in the January quarter and dropped 10.5% a year earlier.

U.K. to Incentivise Savers

U.K. Prime Minister Gordon Brown said on BBC Radio 4 program the government will announce incentives for savers in next months budget, adding that current efforts will help to pull the economy from the present economic trough.

Brown noted that government spending and lower interest rates will provide a stimulus for growth.

The U.K. government will present its budget for the next fiscal year on April 22.

Gainers & Losers

ICAP Plc led gainers in the FTSE 100 index shares with a rise of 20.7% followed by increases in Friends Provident of 20.6%, in HSBC of 14.3%, in Aviva Plc of 11.5%, and Eurasian Natural of 11.2%.

BAE dropped 0.1%.

Europe Markets Review

In London FTSE 100 Index closed higher 172.83 or 4.88% to 3,715.23, in Paris CAC 40 Index increased 144.39 or 5.73% to close at 2,663.68 and in Frankfurt DAX index higher 194.95 or 5.28% to close at 3,886.98. In Zurich trading SMI increased 204.88 or 4.76% to close at 4,512.55.