UK Stocks Track Lower Metals; Output Flat

Mayank Mehta
13 Jan, 2010
New York City

UK stocks closed lower tracking a decline in commodities prices. UK November factory output was unchanged from October. Hershey is likely to bid for Cadbury Plc. Resource sector stocks declined after a weakness in metals and energy prices.

[R]4:00 PM London, 11:00 AM New York – UK stocks closed lower tracking a decline in commodities prices. UK November factory output was unchanged from October. Hershey is likely to bid for Cadbury Plc. Resource sector stocks declined after a weakness in metals and energy prices.[/R]

UK stocks edged lower after a global weakness in commodities prices. Energy and mining related stocks led the decliners. Bankers are facing higher personal tax bill as the government prepares to impose one-time tax on bonuses that exceed £25,000 and income more than £150,000.

UK Treasury estimated net receipt from higher taxes of £2 billion from its previous estimate of £550 million after banks agreed to pay higher taxes than lower compensation and bonuses.

In London FTSE 100 Index closed lower 23.69 or 0.43% to 5,475.02 and the pound edged higher to close at $1.627 and at €1.118.

Hershey is preparing bid for Cadbury Plc according a report from the Associated Press.

Gainers & Losers

Ashmore Group plc the emerging markets asset manager declined 1.6% to 246 pence.

Balfour Beatty plc rose 0.4% to 276.50 pence after the engineering contractor today reached financial close for the £450 million with Darwen and Bolton Councils Building Schools for the Future (BSF) program.

Clarkson Plc rose 1.5% to 775.00 pence after the shipping services firm in its trading statement, noted that the board confirmed that since its update on November 5, trading has continued in line with expectations.

Diploma Plc increased 4.1% to 182.00 pence after the component distributor announced revenues in the first quarter were 7% ahead of the comparable period last year and operating margins continued to benefit from cost reductions implemented last year.

On an underlying basis, adjusting for currency effects and the acquisition of RTD Seals in January 2009, revenues for the first quarter remained unchanged from last year.

Fenner PLC fell 0.4% to 185.10 pence after the industrial conveyor belt maker said trading against a strong comparative in 2008, revenue declines have slowed but, more importantly, operating profit has increased. The company said, “In particular, December, normally a quiet month, yielded better than expected profits with order books strengthening in our major operations.”

Flying Brands Limited surged 13.7% to 76.80 pence after the home shopping firm said sales for Flying Flowers in the peak Christmas trading period were in line with management and market expectations and said annual earnings are ahead of market expectations.

Greggs plc decreased 1.0% to 410.70 pence after the bakery chain said over the four week trading period to December 26 total sales rose 3.1%, like-for-like sales up 1.1%. For the financial year total sales increased 5% and like-for-like sales increased by 0.8%.

N Brown Group plc dropped 4.0% to 247.00 pence after the mail order clothing group announced total group revenue increased 4.9%. Like-for-like sales, excluding revenue from Simply Be in Germany and High & Mighty, were up 3.6%. This improvement has been achieved on top of prior year growth of 8.8%.

Petra Diamonds Limited advanced 2.9% to 62.00 pence after the Africa focused diamond producer announced the company is on track to achieve its production target of 1.2 million carats for the 2010 financial year compared to 1.099 carats in 2009 with group sales and production for the period up 43% and 12% respectively.

SIG plc increased 8.3% to 126.50 pence, the insulation and roofing firm said full-year sales fell 10% to £2.74 billion from £3.05 billion a year ago. Like for like sales reduced 11.5% in sterling and by 15.6% in constant currency.

SQS Software Quality Systems AG rose 0.1% to 237.89 pence after the software testing firm said trading in the second half was in line with expectations and said new contracts signed during the period gave good visibility into 2010.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 47 increased, 54 declined and 1 were unchanged.

Randgold Resources Ltd. decliners in the FTSE 100 index with a loss of 2.80% followed by losses in ICAP Plc of 2.16%, in Lonmin Plc of 2.13%, in London Stock Exchange Group Plc of 1.94%, and in Royal Dutch Shell Plc of 1.71%.

Cadbury Plc led gainers in the FTSE 100 index with a rise of 2.70% followed by increase in Schroders Plc of 2.68%, in Schroders Plc of 2.49%, in The Royal Bank of Scotland Group Plc of 2.44%, and in Admiral Group Plc of 2.37%.