UK Resource Stocks, Commodities Higher

Mayank Mehta
01 Apr, 2010
New York City

UK stocks closed higher after metal prices gained and resource stocks led the gainers in trading. UK, European and Asian economies reported rising manufacturing and improving exports. The pound increased. UK Regulator lowers mobile-phone calls termination fees.

[R]4:00 PM London, 11:00 AM New York – UK stocks closed higher after metal prices gained and resource stocks led the gainers in trading. UK, European and Asian economies reported rising manufacturing and improving exports. The pound increased. UK Regulator lowers mobile-phone calls termination fees.[/R]

UK stocks closed higher after metal prices gained and resource stocks led the gainers in trading. UK, European and Asian economies reported rising manufacturing and improving exports.

China manufacturing index surged at a faster pace and Japan said business sentiment sharply improved in March. Korea and India reported large gains in exports and manufacturing is now reached to pre-crisis level.

Swiss franc surged to record 1.42 euros after it reported sharpest gain in manufacturing in March. Europe’s manufacturing index expanded at the fastest pace in nearly 40 months and the UK index added the most since December 2008.

In London FTSE 100 Index closed higher 65.25 or 1.15% to 5,744.89, in Paris CAC 40 Index increased 60.22 or 1.52% to close at 4,034.23, in Frankfurt DAX index higher 82.01 or 1.33% to close at 6,235.56. In Zurich trading SMI increased 15.55 or 0.23% to close at 6,888.92.

Markets are close on Friday and Monday next week and will reopen on Tuesday.

The private survey of UK manufacturers in March showed an improvement in activities largely on higher exports orders for the seventh month in a row.

The index increased in March to 57.2 from 56.5 in February according to the data released by Markit Economics and the Chartered Institute of Purchasing and Supply. Exports are on the rise on the weaker pound and demand increase in Asia’s fast growing economies.

In London FTSE 100 Index closed higher 65.25 or 1.15% to 5,744.89 and the pound edged higher to close at $1.525 and to €1.128.

The pound is still 25% lower than three years ago aiding exports to European region and Asia.

Gainers & Losers

Booker Group plc added 0.8% to 44.23 pence after the cash and carry group saw in the final quarter total sales rose by 3.8% on the same period last year, with total like-for-likes up by 3.6%. Non-tobacco like-for-like sales rose 3.0%, while like-for-like tobacco sales increased by 4.6%. Fruit and vegetables sales surged 61% and meat sales increased 16%.

BTG plc rose 2.0% to 182.00 pence after the pharmaceutical company said sales and earnings are likely to be better than market estimate.

Grainger plc rose 1.4% to 136.90 pence after the residential property investor today announces that it has acquired PHA Limited for a total consideration of £15.3 million. The company owns 162 residential properties located in Devon. The purchase price reflects a cash yield of 5.7%.

Hamworthy plc fell 6.1% to 305.00 pence after the engineering contractor reported the order book at end of February declined to £163 million from £270 million a year ago.

Laura Ashley Holdings plc surged 11.5% to 14.50 pence after the furniture and clothing retailer posted a 5.2% rise in full-year adjusted pretax profit.

Prezzo plc rose 1.2% to 40.00 pence after the restaurant chain reported a 12% rise in full-year pre-tax profits.

Ryanair Holdings Plc surged as much as 9% after it said that net income in the year ending yesterday is estimated to be at least €310 million compared to previous estimate of €275 million.

Finnair Oyj said in a statement that the company and its pilots union have agreed to cut annual cost by €20 million. Finnair increased 3%. Air France-KLM the airline added 2.3% to €11.98 after the airline confirmed that it expects to breakeven the current year on an operating basis.

Scottish and Southern Energy plc rose 0.1% to 1,103.00 pence after the company through its wholly-owned subsidiary SSE E&P UK Limited, has entered into an agreement with Hess Limited to acquire its natural gas assets and infrastructure in three regions of the North Sea. Company will pay in cash $423 million for Hess’ assets.

Tullow Oil plc advanced 1.2% to 1,266.00 pence after the company announces that the Likonde-1 well, onshore Tanzania, has encountered thick sands with hydrocarbon shows.

Vodafone Group Plc declined 0.2% to 151.70 pence after the UK regulator Ofcom in a statement said the termination charges for carriers to connect calls between networks will decline to 0.5 pence a minute by March 2015 from the current 4.3 pence per minute.

Smaller rivals 3 UK and O2 unit of Telefonica SA are expected to benefit as they generally pay more for the calls to terminate.

The regulator acted after the European Commission said termination rates should decline to 1.3 euro cents and 3 euro cents by 2012.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 93 increased, 6 declined and 3 were unchanged.

Smith & Nephew Plc decliners in the FTSE 100 index with a loss of 0.69% followed by losses in GlaxoSmithKline Plc of 0.67%, in Segro Plc of 0.50%, in Shire Plc of 0.41%, and in Imperial Tobacco Group Plc of 0.30%.

Petrofac Limited led gainers in the FTSE 100 index with a rise of 6.99% followed by increase in Xstrata Plc of 4.12%, in Randgold Resources Ltd. of 4.09%, in Cairn Energy Plc of 3.96%, and in Prudential Plc of 3.84%.