U.K. stocks rose, with the benchmark FTSE 100 (UKX) Index rebounding from an eight-week low, as profit increased at companies from AstraZeneca Plc (AZN) to Unilever Plc and British Sky Broadcasting Plc. (BSY)
AstraZeneca and Unilever advanced more than 2 percent. BSkyB surged 4.9 percent after the U.K.’s biggest pay-television provider reported an increase in third-quarter profit as it added subscribers to its high-definition TV service. BP Plc (BP/) sank the most since December 2008 on concern the costs of containing a worsening oil spill in the Gulf of Mexico will escalate.
The FTSE 100 rose 31.23 points, or 0.6 percent, to 5,617.84. The FTSE All-Share Index (ASX) advanced 0.6 percent and Ireland’s ISEQ Index (ISEQ) climbed 3.6 percent. U.K. shares are rebounding from two days of losses prompted by Standard & Poor’s downgrading the credit ratings of Greece, Portugal and Spain.
“In the last few days bearish investors have been using the weakened sentiment resulting from the Greece issue as an excuse to take some profits,” said Richard Hunter, the London-based head of U.K. equities at Hargreaves Lansdown Stockbrokers. “More optimistic investors have recognized that the strength of corporate earnings currently coming through on both sides of the pond could only be ignored for so long.”
Net income for U.K. companies has topped analysts’ projections by an average of 17 percent since April 12, according to Bloomberg data. In the U.S., income for the first three months of this year is beating estimates at nearly the fastest rate ever for the third time in a year, with 79.4 percent of the companies that have reported topping projections.
Stocks have plunged across Europe this week as German Chancellor Angela Merkel delayed approving a rescue plan for Greece. European Union Economic and Monetary Affairs Commissioner Olli Rehn today said the outcome of talks with Greece will be “a multi-annual program that will lead to major fiscal and structural adjustment,” with more details coming “soon.”
The Federal Reserve yesterday pledged to maintain low interest rates, restating their intention to keep interest rates near zero for an extended period, even as the labor market begins to improve.
Unilever advanced 3.3 percent to 1,980 pence. First-quarter net income jumped to 973 million euros ($1.29 billion), from 731 million euros in the year-earlier period, the London-and Rotterdam-based company said. That beat the average analyst estimate of 909 million euros in a Bloomberg survey. Sales rose 6.7 percent to 10.1 billion euros.
BSkyB surged 4.9 percent to 625 pence, the biggest gain in more than a month. The company said third-quarter operating profit rose to 244 million pounds ($370 million) from 237 million pounds a year earlier.
AstraZeneca advanced 2.1 percent to 2,897 pence as it reported first-quarter profit that beat analysts’ estimates after a U.K. settlement lowered its tax rate. The company raised its full-year earnings forecast.
Standard Life Plc (SL/) gained 4.4 percent to 202 pence after Scotland’s biggest insurer reported a 30 percent rise in first-quarter revenue to 4.65 billion pounds ($7.1 billion) on higher sales of long-term savings products to U.K. companies. That beat the 3.83 billion-pound median estimate of three analysts surveyed by Bloomberg.
BP, which vies with Royal Dutch Shell Plc for the title of Europe’s biggest oil company, sank 6.5 percent to 584.2, the biggest slump in almost 17 months. One of BP’s oil wells in the Gulf of Mexico is leaking as many as 5,000 barrels of crude a day, five times more than previous estimates, the U.S. Coast Guard said.
HMV Group Plc sank 8.6 percent to 72.3 pence, the most since December 2008, after the music and video retailer said fiscal fourth-quarter sales declined in the U.K. and Ireland.
To contact the reporter on this story: Adam Haigh in London at email@example.com.