UK Stocks Down on Weak Commodities, Sentiment

Mayank Mehta
05 Feb, 2010
New York City

UK stocks closed lower on weak metals and energy prices. Xstrata, Vedanta and Rio Tinto declined more than 3%. ICAP Plc, the inter-broker dealer plunged 18% after it lowered the earnings estimate. Liberty International is looking to split the company into two separate listed units.

[R]4:00 PM London, 11:00 AM New York – UK stocks closed lower on weak metals and energy prices. Xstrata, Vedanta and Rio Tinto declined more than 3%. ICAP Plc, the inter-broker dealer plunged 18% after it lowered the earnings estimate. Liberty International is looking to split the company into two separate listed units.[/R]

Stocks in London declined after the fall in metals and energy prices and the inter-broker dealer ICAP Plc lowered its earnings outlook.

In London FTSE 100 Index closed lower 78.39 or 1.53% to 5,060.92 and the pound edged lower to close at $1.563 and edged lower to close at €1.144.

Copper and gold in London and New York trading declined more than 1.3% and silver decreased more than 4% for the second day in a row.

Miners closed lower on weak metals prices. Xstrata Plc declined 5.2% to 950 pence, Rio Tinto decreased 1.9% to 3,036 pence and Vedanta Resources dropped 4% to 2,319 pence.

Gainers & Losers

Avanti Communications Group Plc decreased 6.6% to 473 pence after the provider of satellite broadband internet services said first-half revenues rose 1.2% to £3.26 million from £3.22 million a year ago. Net loss for the first-half was £0.27 million or 0.60 pence per diluted share compared to net profit of £1.97 million or 6.37 pence per share a year ago.

BAE Systems Plc increased 1.6% to 345.90 pence after the defense contractor reached a settlement with the U.S. Department of Justice and the Serious Fraud Office in the UK. The company will pay $450 million to settle bribery charges.

Bellway plc declined 2.1% to 744.50 pence after the homebuilder said in the first-half the group completed the sale of 2,247 homes from 2,014 a year ago at an average selling price of £156,000 with the operating margin for the six months being around 6%. The margin for the full year is estimated to be at the higher end of the 6% to 7% range.

BG Group plc dropped 4.4% to 1,098.00 pence after the natural-gas producer said fourth quarter revenues fell 10.5% to £2.65 billion from £2.96 billion a year ago. Net profit for the quarter fell 38.5% to first-half £465 million or 13.7 pence per diluted share compared to net profit of £756 million or 22.4 pence per share a year ago.

Blacks Leisure Group plc rose 0.4% to 56.75 pence after the outdoor clothing and equipment retailer today announces that it proposes to raise approximately £20.28 million in an open offer of 20,370,371 at 54 pence per share.

British Airways Plc slipped 1.1% to 208.80 pence after the airline said nine months revenues fell 13% to £6.14 billion from £7.05 billion a year ago. Net loss for the nine months was £245 million or 22.4 pence per diluted share compared to net loss of £127 million or 12.0 pence per share a year ago.

Carluccio''s Plc closed unchanged at 91.50 pence after the Italian restaurant chain said turnover growth was 8% for the 17 weeks to January 24 over the prior year period, slightly ahead of the board''s expectations.

Compass Group PLC gained 5% to 449.40 pence after the contract caterer said organic revenue improved from a decline of approximately 3% in the fourth quarter of 2009, to a decline of 1.7% in the first quarter of the year and the pipeline of new business remains “strong.”

Electrocomponents plc rose 1.5% to 180.60 pence after the distributor of electronic, electrical and industrial supplies said group sales overall for the four months to the end of January 2010 were flat but by December all regions had returned to year-on-year sales growth.

ICAP plc the Interdealer broker plunged 18.1% to 299.00 pence after it lowered its pre-tax earnings outlook to £295 million and £315 million compared to the previous estimate between £305 million and £354 million.

Liberty International PLC decreased 2.6% to 7.45 pence after the shopping centre operator’s board confirmed that it is actively considering a reorganization of the group and obtaining independent approvals to split the company in to two separate listed units.

Melrose Resources plc increased 3.6% to 302.00 pence after the oil and gas exploration announced a new exploration discovery and commencement of seismic data acquisition in Egypt.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 8 increased, 94 declined and none were unchanged.

ICAP Plc decliners in the FTSE 100 index with a loss of 19.47% followed by losses in Lloyds Banking Group Plc of 5.73%, in Xstrata Plc of 5.19%, in Invensys Plc of 5.13%, and in 3i Group Plc of 4.34%.

Compass Group Plc led gainers in the FTSE 100 index with a rise of 5.19% followed by increase in BAE Systems Plc of 1.59%, in Liberty International Plc of 0.97%, in Johnson Matthey Plc of 0.67%, and in Kazakhmys Plc of 0.67%.