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Market Update : 
Bernanke Curve, UK Stocks Decline
Author: 123jump.com Staff
123jump.com
Last Update: 4:08 PM EST February 14 2008


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UK stocks changed course and declined after the comments from the Fed Chairman Bernanke. The cautionary comments put investors on the defensive. He also reiterated that the downside risk to the economy has increased and banking sector may remain under pressure. He sounded optimistic note on the inflation but also suggested that the economic growth in the near term is likely to be sluggish. UK stocks declined, led by a fall in housing and banking stocks on the comments.

 
Diageo led advancers in the FTSE 100 stocks with a rise of 4.55% followed by gains in Reckitt Benckise of 2.86%, in Sainsbury Plc of 2.63%, in Vedanta Resources of 2.56%, in BT Group of 2.43%.

Diageo rose after the company reported first half profit rose 8.9% after the liquor maker reported an 8.9 % gain in first-half profit to £975 million on higher sales of Smirnoff vodka and Johnnie Walker whiskey in Asia and North America.

Anglo America climbed 2.28% and Xstrata jumped 1.90% as a result.

HBOS Plc led decliners in the FTSE 100 stocks with a drop of 5.11% followed by losses in Home Retail Group of 3.9%, in British Land Co. of 3.87%, in Schroders Plc of 3.77% and Schroders of 3.31%.

Other financial stocks also declined on Bernanke’s comments and after UBS added $26.2 billion in exposure to the U.S. mortgage backed securities. Alliance & Leicester fell 2.77%, Barclays declined 2.37%, and Royal Bank of Scotland fell 2.23%.

Homebuilders also fell as well. Wolseley shed 2.51% and Hammerson edged down 3.02%.

International Markets

In Tokyo Nikkei 225 Index closed higher 558.15 or 4.27% to 13,626.45, in Hong Kong Hang Seng index increased 852.13 or 3.68% closed to 24,021.68. Australia ASX 200 index increased 142.70 or 2.57% to close 5,684.80.

In South Korea Kospi Index increased 65.67 or 4.02% to close at 1,697.45, in Thailand SET index closed higher 2.70 or 0.33% to 832.11 and Indonesia JSE Index edged increased 64.86 or 2.48% to 2,675.65. Sensex index in India increased 817.50 or 4.82% to 17,766.63.

In London FTSE 100 Index closed lower 5.40 or 0.09% to 5,874.70, in Paris CAC 40 Index increased 3.25 or 0.07% to close at 4,858.65 and in Frankfurt DAX index lower 11.39 or 0.16% to close at 6,962.28. In Zurich trading SMI decreased 34.46 or 0.46% to close at 7,501.99.
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