U.K. Stocks Rebound From Six-Day Selloff; BHP, Heritage Oil Gain
U.K. stocks advanced, rebounding from a six-day selloff, amid speculation that tomorrow’s Group of Seven nations meeting will act to calm markets roiled by Japan’s largest earthquake on record.
BHP Billiton Ltd. (BHP) and Xstrata Plc (XTA) rallied more than 3 percent in London as copper climbed on optimism that demand from Japan will increase. SIG Plc (SHI) led building-related companies higher, surging 7.8 percent. Heritage Oil Plc (HOIL) jumped 8.2 percent on a report the explorer rejected a takeover bid from Abu Dhabi.
The FTSE 100 Index (UKX) climbed 1.8 percent to 5,696.11 at the 4:30 p.m. close in London, rebounding from the longest stretch of losses in more than two years. The FTSE All-Share Index (ASX) also gained 1.7 percent, while Ireland’s ISEQ Index rose 2.9 percent.
“Buyers have stepped up as recent falls have been seen to be overdone,” said Jonathan Sudaria, a trader at London Capital Group. The “emergency G-7 meeting may lead to some form of global intervention to stabilize markets.”
G-7 finance chiefs will hold talks on financial markets and Japan’s economy, the world’s third-largest, when they meet tomorrow after global equities plunged and the yen surged to a post-World War II high.
The benchmark FTSE 100 had tumbled 9.4 percent from this year’s high on Feb. 8 through yesterday as political unrest in the Middle East and North Africa sent oil prices surging and Japan battled to stop its Fukushima Dai-Ichi nuclear power plant from leaking radiation following the March 11 earthquake and subsequent tsunami.
Japan’s Nuclear Plant
Stocks extended their gains amid speculation Japan will contain its nuclear crisis. More than 300 workers battled to prevent a meltdown and spread of radiation at the crippled power station today, an increase from 180 yesterday. Efforts to use water cannons and helicopters to cool the reactor may have had some success, Tokyo Electric Power Co. said.
BHP, the world’s largest mining company, led a gauge of mining shares higher, climbing 3.1 percent to 2,281 pence. Xstrata, the world’s fourth-largest copper producer, advanced 3.7 percent to 1,378 pence, while Antofagasta Plc (ANTO) increased 4.3 percent to 1,347 pence.
Three-month-delivery copper on the London Metal Exchange climbed as much as 3.3 percent to $9,565 a metric ton. The rebuilding of damaged infrastructure should lead to greater consumption of commodities, HSBC Securities’ James Steel wrote in a March 15 report.
SIG surged 7.8 percent to 130.5 pence after Europe’s biggest supplier of insulation said trading for the first two months of this year was in line with its forecasts and exceeded trading in the year-earlier period. The company also plans to resume paying dividends after suspending them to reduce debt and conserve cash.
Travis Perkins Jumps
Travis Perkins Plc (TPK), the U.K.’s biggest building merchant, rose 4.3 percent to 974 pence, while Wolseley Plc (WOS), the world’s biggest supplier of heating and plumbing products, gained 4 percent to 2,077 pence.
Both stocks had declined for the previous five days.
Heritage Oil rallied 8.2 percent to 313.5 pence after the Financial Times reported that the company has rejected an informal 1.2 billion-pound ($1.9 billion) offer from an unidentified Abu Dhabi-based company. The newspaper cited a person familiar with the situation. Heritage’s chief financial officer and head of investor relations were not available to comment.
Aegis Group Plc (AGS) jumped 6.3 percent to 138.6 pence, the first advance in four days, after the world’s largest independent buyer of advertising space forecast higher operating profit in 2011 and a 10 percent increase in its full-year dividend.
Premier Farnell Plc (PFL) gained 1.3 percent to 280.2 pence after the U.K. supplier of electronic components posted a 77 percent climb in full-year net income to 66.2 million pounds. Revenue advanced 25 percent.
Hikma Pharmaceuticals Plc (HIK) advanced 4 percent to 723 pence after Morgan Stanley raised its recommendation on the Jordanian drugmaker to “overweight” from “equal weight.”
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