UK Mortgage Approvals Rise; Services Shrink

Mayank Mehta
23 Dec, 2009
New York City

UK stocks participated as world markets rebounded. Metals and energy prices advanced in London. Mortgage approvals in November surged to a two-year high. Service industry index declined 0.2% in the three months to October.

[R]4:00 PM London, 11:00 AM New York – UK stocks participated as world markets rebounded. Metals and energy prices advanced in London. Mortgage approvals in November surged to a two-year high. Service industry index declined 0.2% in the three months to October.[/R]

Stocks in London and Europe closed higher in a rally as commodities prices gained, investor sentiment improved and the prospect of economic recovery looked brighter in the U.S.

In London FTSE 100 Index closed higher 33.21 or 0.6% to 5,361.87 and the pound edged lower to close at $1.594 and at €1.118.

The pound was unchanged after the release of latest interest rate setting committee meeting transcript. The committee voted unanimously to keep the 200 billion government bond purchase program in place and left the key rate unchanged at 0.5%.

The British Bankers Association reported that mortgage lending increased to record high in two years in November. Gross mortgage lending increased by £9.2 billion from £9 billion in October but declined 12.2% from a year ago.

Number of mortgage approvals increase to 44,713 from 42,552 in October and surged 152.3% from a year ago and 0.4% from two years ago month.

Separately, the Office for National Statistics reported that service industry index declined 0.2% in three months to October.

Gainers & Losers

Balfour Beatty plc rose 0.5% to 255.00 pence after QinetiQ selected the company for an integrated facilities management services for a seven-year contract with a base-line value of £15 million per annum plus additional fees for non-core services.

Chloride Group Plc dropped 0.9% to 173.60 pence after the power solutions provider acquired AEES, a French secure power company focused on the energy and infrastructure market from Sofisme SA, a part of the French Socaldi Group.

ContentFilm plc decreased 7.1% to 1.62 pence after the film and television sales company said first-half revenues fell 19% to £6.5 million from £8.0 million a year ago. Net profit for the first-half was £0.60 million or 0.3 pence per diluted share compared to net loss of £2.40 million or 1.4 pence per share a year ago.

Fresnillo Plc rose 1% to 759.50 pence after the mining and beneficiation of non-ferrous minerals said that Minera Penmont S. de R. L. de C.V., its 56% owned joint venture with Newmont Mining Corporation (44%), has submitted a binding proposal to Canplats Resources Corporation for the acquisition for C$4.40 per share.

Premier Oil Plc climbed 0.5% to 1,096.00 pence said that it has completed the sale of its 10% interest in the NW Gemsa permit in Egypt to Sea Dragon Energy Inc for $14.8 million after adjustments for working capital.

Rio Tinto plc added 1.5% to 3,267.00 pence and the mining giant said that it has accepted the offer by Amcor for the sale of the Alcan Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions.

Pangea DiamondFields plc the Africa-focused diamond producer surged 15% to 1.47 pence.

Supporta Plc advanced 1.5% to 32.50 pence after the home care provider said it has received a cash offer from Allied Healthcare International.

Tullow Oil plc decreased 0.08% to 1,279.00 pence announces that the Mahogany Deep-2 appraisal well offshore Ghana confirmed the down-dip extent of the main Jubilee reservoirs in the West Cape Three Points Block.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 67 increased, 231 declined and 4 were unchanged.

Cairn Energy Plc decliners in the FTSE 100 index with a loss of 4.25% followed by losses in BT Group Plc of 3.03%, in The Royal Bank of Scotland Group Plc of 1.80%, in United Utilities Group Plc of 1.59%, and in Liberty International Plc of 1.25%.

Eurasian Natural Resources Corporation Plc led gainers in the FTSE 100 index with a rise of 3.80% followed by increase in Randgold Resources Ltd. of 3.73%, in British American Tobacco Plc of 3.08%, in Xstrata Plc of 2.83%, and in Vedanta Resources Plc of 2.69%.