OECD Cuts UK Outlook; Stagecoach, Inchcape Surge

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

UK stocks surged after a rebound in mining companies. The better than expected U.S. durable goods orders lifted stocks in UK and Europe. The OECD forecasted deeper recession for UK and slower recovery in 2010. Better than expected profits lifted Stagecoach, Imagination Technologies and Inchcape.

[R]6:00 PM London, 1:00 PM New York – UK stocks surged ahead after a rebound in mining companies. The better than expected U.S. durable goods orders lifted stocks in UK and Europe. The OECD forecasted deeper recession for UK and slower recovery in 2010. Better than expected profits lifted Stagecoach, Imagination Technologies and Inchcape.[/R]

In London FTSE 100 Index closed higher 49.96 or 1.18% to 4,279.98.

The Organization for Economic Cooperation and Development revised its forecast of economic decline for the 30 countries it reviews and signaled a deeper recession and slower recovery for the UK.

The average economic decline of all 30 nations is estimated at 4.1% compared to 4.3% decline estimated in March. The economies are expected to recover at 0.7% in 2010 rise compared to 0.1% increase in March estimate.

The UK economy is expected to fall 4.3% in 2009 compared to a decline of 3.7% in March. The forecast is lower than the UK government estimated decline of 3.5%.

Euro zone economy is expected to decline 4.8% and flat in 2010.

China is estimated to lead the world with an increase o 7.7% in 2009 followed by 5.9% increase in India. Russian economy is expected to fall 8% and that of Brazil is expected to decline 0.8%.

Gainers & Losers

Metals and mining companies closed higher. Lonmin Plc increased 7% to 1,214 pence, Eurasian Natural Resources increased 6.9% to 662 pence, Anglo American added 10.2% to 1,820 pence and Kzakhmys jumped 6.9% to 630 pence.

Pearson Plc increased 0.2% to 617 pence after it announced $30 million investment in two India based education companies. The company formed a joint venture with Educomp Solutions to provide vocational training and acquired 17.2% stake in TutorVista.com to hold the largest stake in the online tutoring company.

Kesa Electricals increased 6.6% to 109.50 pence after it reported adjusted profit declined to £77 million.

Imagination Technologies surged 34% to 153.75 pence after it reported adjusted annual 56% jump in profit.

Stagecoach surged 8.5% to 127.75 pence after it reported net income for the full-year ending on April 2009 fell 46.4% to £133.5 million or 18.5 pence compared to net profit of £249.1 million or 33.8 pence a year ago. Revenues in the year increased 19.3% to £2,103.3 million.

Inchacape soared 15.4% to 18.75 pence after it estimated second quarter profit to be higher than £20 million income in the first quarter.

Premier Oil increased 3.6% to 1,097 pence after it reported results of test drilling off the coast of Vietnam with flow of 3,265 barrels a day.

Shanks Group increased 5.2% to 71 pence after it said its discounted rights offering was subscribed more than 95%.

McBride surged 10.6% to 136 pence after it estimated full year profit to be as high as £35 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 71 increased, 30 declined and 1 were unchanged.

Man Group Plc decliners in the FTSE 100 index with a loss of 4.09% followed by losses in Friends Provident plc of 3.04%, in Experian PLC of 3.00%, in Wm Morrison Supermarkets PLC of 1.84% and in Unilever PLC of 1.81%.

Anglo American plc led gainers in the FTSE 100 index with a rise of 10.17% followed by increase in Lonmin Plc of 7.05in Kazakhmys PLC of 6.87%, in Eurasian Natural Resources Corporation PLC of 6.85%, in Rio Tinto plc of 5.55%.

Europe Markets Review

In London FTSE 100 Index closed higher 49.96 or 1.18% to 4,279.98, in Paris CAC 40 Index increased 67.94 or 2.18% to close at 3,184.76 and in Frankfurt DAX index higher 128.86 or 2.74% to close at 4,836.01. In Zurich trading SMI increased 122.11 or 2.29% to close at 5,443.42.