FTSE 100 Index in London Drops 2.2%

Mayank Mehta
04 Feb, 2010
New York City

The UK benchmark index dropped more than 2% after a rise in jobless claims in the U.S. Bank of England left its key lending rate at 0.5% and ended the program to support government printing money to revive the economy. Vodafone lifted cash flow outlook. Unilever sales growth slowed.

[R]4:00 PM London, 11:00 AM New York – The UK benchmark index dropped more than 2% after a rise in jobless claims in the U.S. Bank of England left its key lending rate at 0.5% and ended the program to support government printing money to revive the economy. Vodafone lifted cash flow outlook. Unilever sales growth slowed.[/R]

Bank of England left its key lending rate at 0.5% and the European Central Bank left its key lending rate at 1%. The Monetary Policy Committee in the UK decided to not extend the government bond purchase program of £200 billion but left the option open to buy more bonds if the economy continues to weaken.

In London FTSE 100 Index closed lower 113.84 or 2.17% to 5,139.31 and the pound edged lower to close at $1.578 and edged higher to close at €1.143.

Vodafone surged on higher than expected free cash flow, Unilever Plc declined after sales growth slowed and Royal Dutch Shell fell after it reported lower than expected earnings.

Vodafone Group increased 5.4% after it reported higher than estimated cash at the end of 2009. The company said it has £6.5 billion before license and spectrum payments. The company two months ago said that it is ahead in cutting costs by £1 billion and is planning to cut additional £1 billion by 2012.

Sales in the quarter ending in December increased 10.3% to £11.5 billion and adjusted operating profit for the year is expected to be between £11.4 billion and £11.8 billion.

Gainers & Losers

Aviva plc rose 0.4% to 399.60 pence after the insurer said fourth quarter life and pension sales rose 21% to £8 billion a year ago. Pension sales increased 17% compared to third quarter 2009 in the UK, 39% in Europe and 45% in the U.S.

BTG plc rose 0.6% to 178.70 pence after the pharmaceutical company today announced the Swiss regulatory agency has approved the antidote DigiFab™ for the treatment of patients with life-threatening digitalis intoxication.

Matchtech Group plc fell 2.4% to 222.00 pence after the recruitment firm stated that its trading has continued to be in line with the board''s expectations.

McBride plc rose 1.3% to 223.20 pence after the personal care products group said first-half revenues rose 5% to £412.4 million from £392.2 million a year ago. Net profit for the first-half rose 354% to £16.8 million or 9.2 pence per diluted share compared to net profit of £3.7 million or 2.0 pence per share a year ago.

National Grid plc the gas and electricity pipeline grid operator decreased 0.3% to 631.50 pence.

Royal Dutch Shell plc fell 1.4% to 1,748.50 pence after the Anglo-Dutch oil giant announced that in 2010 the company is targeting a underlying cost reduction of at least $1 billion, and elimination of 1,000 jobs.

RPS Group plc the small cap environmental and planning consultancy fell 2.2% to 192.40 pence.

StatPro Group Plc rose 0.9% to 109 pence after the asset management software specialist today announces that Aviva Investors has signed a contract for its GIPS compliance software.

Unilever Plc declined 3.5% to 1,865.00 pence after the household goods giant said full-year sales increased 3.5%. Underlying volume growth at 2.3% accelerated through the year, reaching 5.0% in the fourth quarter. The increase in volume growth was achieved in most of company’s key categories and countries and translated into improved share performance in all regions as the year progressed.

Vodafone Group Plc gained 3.8% to 139.70 pence and in the interim management statement for the quarter ended December group revenue increased 10.3% to £11.5 billion. Group service revenue increased 11.0% to £10.7 billion; organic service revenue fell 1.2 %, a 1.8 percentage point improvement on the previous quarter.

Yell Group plc surged 12.9% to 41.55 pence after the yellow pages publisher reported third quarter revenue declined 8.0% to £1,522.9 million from £1,655.1 million a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 5 increased, 96 declined and 1 were unchanged.

Kazakhmys Plc decliners in the FTSE 100 index with a loss of 9.51% followed by losses in Antofagasta Plc of 7.93%, in Barclays Plc of 7.84%, in Eurasian Natural Resources Corporation Plc of 7.14%, and in Vedanta Resources Plc of 6.90%.

Vodafone Group Plc led gainers in the FTSE 100 index with a rise of 3.57% followed by increase in Autonomy Corporation Plc of 2.70%, in Associated British Foods Plc of 0.91%, in GlaxoSmithKline Plc of 0.74%, and in BAE Systems Plc of 0.06%.