UK Stocks Rally; BAA Loss Surges

123jump.com Staff
05 May, 2009
New York City

UK stocks closed higher on a rally in banks and mining stocks. Higher commodities prices lifted stocks of miners and optimism about U.S. consumers and Chinese manufacturing industry contributed to the surge. The airport operator BAA reported five-fold increase in loss.

[R]9:00PM London – UK stocks closed higher on a rally in banks and mining stocks. Higher commodities prices lifted stocks of miners and optimism about U.S. consumers and Chinese manufacturing industry contributed to the surge.[/R]

UK stocks rebounded on the first day of trading this week as mining and banks gained. The commodities rally in recent months on the hopes of expanding manufacturing in China and bottoming in the U.S. housing market lifted miners.

Vedanta Resources, Xstrata, Antofagasta, and Kzakhmys Plc traded higher.

A private measure of UK construction industry suggested that the decline in the industry has slowed considerably. The index jumped to 38.1 from 30.9 in April as measured by Markit and Chartered Institute of Purchasing and Supply. The measure below 50 indicates the industry is still shrinking but the rate of decline as considerably slowed.

Wolseley Plc increased 10.3% to 1,349 pence. Balfour Beatty Plc increased 2.8% to 351.50 pence and Taylor wimple Plc surged 13% to 50 pence, but still below its 52-week high of 142 pence.

BAA Ltd increased 5% to 23.74 pence after reported first quarter loss widened to 228.8 million pounds from 39.2 million pounds a year ago on 16% rise in sales to 522 million pounds. The number passengers declined 10% to 24.8 million at three airports Heathrow, Gatwick and Stansted owned by the Spanish company.

The airport operating company reported quarterly loss on high interest costs of 327.2 million pounds and losses from interest rates swaps of 80.7 million pounds.

BAA also reported that it has received several bids to acquire Gatwick airport after the UK Competition Commission ruled the breakup of the company. cc

Carluccio’s Plc jumped 17.8% to 92.50 pence after London Times reported that the company may be a takeover target.

Stocks in Europe declined after investors cautioned that recent rally is not supported by fundamental improvement in the financial and economic conditions. Banks increased in European trading after UBS reported smaller than expected loss.

Weak earnings from Adidas and Metro also dragged sentiment in Frankfurt trading.

FTSE 100 Index Gainers & Losers

William Morrison Supermarkets led decliners in the FTSE 100 index with a loss of 3.4% followed by losses in British Sky Broadcasting of 2.8%, in Home Retail Group of 2.5%, in Amlin Plc of 2.3%, in Scottish & South of 2.2%.

British Airways Plc led gainers in the index with a rise of 12.1% followed by gains in Vedanta Resources of 11.5%, in Lloyds Banking Group of 10.5%, in Prudential Plc of 10.1%, in Kazakhmys Plc of 10%. Royal Bank of Scotland and Eurasian Natural gained more than 9%.

Europe Markets Review

In London FTSE 100 Index closed higher 93.72 or 2.21% to 4,336.94, in Paris CAC 40 Index decreased 12.97 or 0.40% to close at 3,225.00 and in Frankfurt DAX index lower 49.42 or 1.01% to close at 4,853.03. In Zurich trading SMI decreased 37.41 or 0.70% to close at 5,280.93.