Miners Rally in London; Tayolr Wimpey Surges

123jump.com Staff
19 Jun, 2009
New York City

UK stocks closed higher after miners rallied for the second day this week. On a triple witching day, the stocks edged higher on a quiet day. Carnival, Candover, Mitchells & Butlers led gainers in London trading. Xstrata, Antofagasta, Vedanta and other miners closed up more than 2.5%.

[R]6:00 PM London, 1:00 PM New York – UK stocks closed higher after miners rallied for the second day this week. On a triple witching day, the stocks edged higher on a quiet day. Carnival, Candover, Mitchells & Butlers led gainers in London trading.[/R]

UK stocks closed higher as mining stocks staged a rally on the hopes of economic recovery. In the absence of any economic news it was broker comments and market sentiment that prevailed in trading.

In London FTSE 100 Index closed higher 65.07 or 1.52% to 4,345.93.

Earnings Review

Carnival plc, the cruise and vacation company said second quarter revenues fell 12% to $2.95 billion from $3.38 billion a year ago. Net profit in the quarter fell 33% to $264 million or 33 cents per diluted share compared to net profit of $390 million or 49 cents per share a year ago.

Go-Ahead Group plc, a passenger transport services provider expects full year bus revenue growth of around 6%. Operating profit for the bus division is at similar levels of £66.2 million reported a year ago. In Southern full year passenger revenue is expected to increase by around 7% to 8%. Aviation Services division's like-for-like full year aircraft turnarounds are expected to decrease by around 10% and 25%.

Home Retail Group, the home and general merchandise retailer said first quarter total sales at Argos grew by 0.9% to £937 million. Like-for-like sales declined 2.8% in the quarter. Multi-channel sales accounted for 42% of total Argos sales. Total sales at Home base grew by 5.8% to £465 million and Like-for-like sales increased 3.8% in the quarter.

Marston’s PLC, British pubs group said first-half revenues fell 45% to £307.5 million from £316.4 million a year ago. Net profit in the first-half fell 46% to £13.2 million or 8.0 pence per diluted share compared to net profit of £24.4 million or 9.9 pence per share a year ago.

Gainers & Losers

The home builder Taylor Wimpey surged 9.7% to 34 pence after it reported UK order backlog surged 73% to 971 million from 562 million at the end of December last year. The order book in the U.S. increased to $846 million from $711 million at the end of December last year.

Xstrata Plc surged 4% to 681 pence after The Financial Times reported that the parent of the company Glencore may in discussion to explore going public.

Other miners rallied. Lonmin Plc increased 5.6% to 1,250 pence, Vedanta Resources added 2.8% to 1,422 pence and Antofagasta Plc edged up 2.4% to 597 pence.

Mitchells & Butlers soared 11.7% to 250.75 pence after Bahamas based investor Joe Lewis took a stake in the company.

Harvey Nash decreased 1.2% to 40 pence after it reported revenue gains of 3% in the first quarter of three months to April.

Insurance companies gained after Deutsche Bank lifted its price target on several companies in the sector. Prudential Plc increased 4.4% to 423 pence, Standard Life added 3.2% to 182 pence and Aviva closed up 5.8% to 336 pence.

Carnival Plc surged 6.2% to 1,668 pence after several brokers recommended the stocks on the rise in daily yields at the cruise operator. However, the company lowered the earnings guidance. The cruise operator is one of the few companies that do not hedge its fuel needs as much as airlines and other operators do.

Candover Investments soared 11.5% to 300 pence after it agreed to sell energy research company Wood Mackenzie to Charterhouse Capital Partners in a deal that valued the company at £553 million. The deal will generate cash of £36.2 million of which £19.6 million will be paid immediately upon the closing of the deal.

Serica Energy increased 1.6% to 62 pence after it was awarded two oil drilling permits at the offshore locations in Morocco.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 87 increased, 15 declined and none were unchanged.

Smiths Group plc decliners in the FTSE 100 index with a loss of 2.19% followed by losses in The Royal Bank of Scotland Group plc of 2.11%, in Vodafone Group Plc of 1.52%, in Amlin plc of 1.39% and in Autonomy Corporation plc of 1.36%.

Carnival plc led gainers in the FTSE 100 index with a rise of 6.17% followed by increase in Aviva Plc of 5.81%, in ICAP Plc of 5.57%, in Lonmin plc of 5.57%, in Land Securities Group plc of 5.30%.

Europe Markets Review

In London FTSE 100 Index closed higher 65.07 or 1.52% to 4,345.93, in Paris CAC 40 Index increased 27.21 or 0.85% to close at 3,221.27 and in Frankfurt DAX index higher 1.98 or 0.04% to close at 4,839.46. In Zurich trading SMI increased 44.75 or 0.83% to close at 5,421.59.