UK Stocks Rebound from Early Decline

Mukesh Buch
26 May, 2009
New York City

UK stocks staged a sharp reversal in the afternoon trading after the release of consumer confidence data in the U.S. The benchmark stock surged from a decline of 1.5% to close up 1%. Rio Tinto offered 33% discount for iron ore shipment till the end of March next year.

[R]6:00 PM London, 1:00 PM New York – UK stocks staged a sharp reversal in the afternoon trading after the release of consumer confidence data in the U.S. The benchmark stock surged from a decline of 1.5% to close up 1%.[/R]

UK stocks following the market developments in the U.S. closed higher. A rise in consumer confidence in the U.S. lifted commodities and retailers. Markets in Europe and UK gained on better than expected confidence data.

The benchmark index FTSE 100 index in London reversed from their earlier course of decline of nearly 1.5% to close up 1%.

In London FTSE 100 Index closed higher 46.43 or 1.06% to 4,411.72.

Gainers & Losers

Aveva Group Plc increased 10% or 60.5 pence to 639.50 pence after it reported 29% increase in annual revenues and 23% rise in net profit.

Brixton Plc increased 13.4% to 70 pence after U.S. based Blackstone Group and Australia based Macquarie Group are discussing with the company to acquire properties or take a stake in the company.

Rio Tinto declined 16 pence to close at 27.53 after the mining group cut iron ore price by 33% to Nippon Steel Corporation in Japan. The first price in cut since 2002 may not be enough as Chinese makers are expected to ask for a discount between 40% and 50%.

BHP Billiton increased 1.4%.

Lloyds Banking Group fell 1.8 pence to 66.80 pence and Royal Scotland declined 0.7 pence to 40.20 pence.

Albemarle & Bond increased 18.5 pence to 214 pence after it said that annual earnings for the period ending in June are likely to exceed market expectation.

Thomas Cook declined 10 pence to 224.75 pence after Credit Suisse lowered its price target to 305 pence from 333 pence.

Supermarket retailers closed higher. Tesco closed up 3.5% to 363 pence, J Sainsbury increased 1.8% to 318 pence and Marks & Spencer added 1.2% to $3.50.

Earnings Review

Aveva Group Plc, a provider of engineering data and design IT systems said full-year revenues rose 29% to £164.04 million from £127.56 million a year ago. Net profit in the year rose 23% to £42.15 million or £61.98 per diluted share compared to net profit of £34.25 million or £50.38 per share a year ago.

Aveva Group Plc, in the last one year traded as high as 1,640.00 pence in July 2008 and as low as 449.50 pence in March 2009. Based on the yesterday’s closing price of 606.50 pence the company has market cap of £412.34 million.

Holidaybreak plc, a education, leisure and activity travel group said first-half revenues fell 2% to £153.2 million from £156 million a year ago. Net loss in the first-half was £31.5 million or £65.1 per diluted share compared to net loss of £13.1 million or £27.1 per share a year ago.

Holidaybreak plc, in the last one year traded as high as 512.00 pence in May 2008 and as low as 249.00 pence in October 2008. Based on the yesterday’s closing price of 290.00 pence the company has market cap of £141.69 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 73 increased, 28 declined and 1 were unchanged.

Thomas Cook Group PLC decliners in the FTSE 100 index with a loss of 4.2% followed by losses in Lloyds Banking Group PLC, of 2.6%, in Friends Provident PLC, 2.5%, in Cairn Energy PLC of 2.3% and in Cable & Wireless PLC of 1.9%.

Eurasian Natural Resources Corporation PLC led gainers in the FTSE 100 index with a rise of 6.7% followed by increase in British American Tobacco PLC of 3.8%, in Tesco PLC of 3.5%, in Rexam PLC of 3.3%, in AMEC PLC of 3.1%.

Europe Markets Review

In London FTSE 100 Index closed higher 46.43 or 1.06% to 4,411.72, in Paris CAC 40 Index increased 33.93 or 1.05% to close at 3,270.09 and in Frankfurt DAX index higher 67.15 or 1.37% to close at 4,985.60. In Zurich trading SMI decreased 14.97 or 0.27% to close at 5,431.27.