Most U.K. Stocks Climb as Economy Rebounds; Barclays Retreats

Most U.K. stocks climbed, keeping the benchmark FTSE 100 Index (UKX) near a two-month high, after a rebound in the British economy in the first quarter outweighed earnings at Barclays Plc (BARC) that disappointed investors.

GlaxoSmithKline Plc (GSK) paced advancing shares after the drugmaker posted results that beat analyst estimates. Aggreko Plc (AGK) rallied 4.4 percent after saying profit this year will be higher than in 2010. Barclays, Britain’s third-largest bank by assets, tumbled 4.8 percent.

The FTSE 100 closed little changed at 6,068.16 as of 4:30 p.m. in London as two stocks rose for each one that fell. Tesco Plc (TSCO) and ARM Holdings Plc (ARM) traded without the right to their latest dividends, pulling the measure lower. The FTSE All-Share Index was also almost unchanged while Ireland’s ISEQ Index fell 0.2 percent.

“The only game in town that was ever likely to get people excited today was publication of the initial first-quarter U.K. gross domestic product numbers,” said Howard Wheeldon, a senior strategist at BGC Partners in London. The “numbers at least place us back at square one on the so-called recovery jigsaw board.”

U.K. GDP rose 0.5 percent from the final quarter of 2010 when it fell by the same amount, according to the Office for National Statistics in London, amid the strongest surge in service industry growth for four years. The increase matched economists’ forecasts.

Glaxo Gains

Glaxo advanced 2.1 percent to 1,286.5 pence. The U.K.’s biggest drugmaker reported a 14 percent increase in first- quarter profit to 1.53 billion pounds ($2.5 billion), lifted by a gain from the sale of its stake in Quest Diagnostics Inc.

Earnings excluding restructuring costs totaled 32.2 pence a share, topping analysts forecast of 31.6 pence.

Aggreko jumped 4.4 percent to 1,786 pence after the world’s largest provider of mobile power supplies said trading profit in 2011 will be “slightly” ahead of 2010.

Barclays limited gains in the FTSE 100, falling 4.8 percent to 287.5 pence. Pretax profit at its investment banking unit dropped 33 percent in the first quarter to 982 million pounds as revenue declined 15 percent. The bank posted a 5 percent fall in overall net income to 1.01 billion pounds which missed the average analyst estimate of 1.21 billion pounds.

Reckitt Benckiser Group Plc (RB/) gained 1.9 percent to 3,324 pence after analysts at Sanford C. Bernstein & Co. said Unilever Plc may pursue the maker of Lysol cleaners. Separately, Citigroup Inc. advised clients to buy the stock in a note to clients citing “compelling” valuations.

Bodycote, AB Foods

Bodycote Plc (BOY), a supplier of metal-strengthening services to Ford Motor Co., surged 13 percent to 380 pence after the company forecast full-year operating profit toward the top end of analysts’ forecast range. Numis Securities upgraded the shares to “add.” Analysts at Arbuthnot also advised buying the stock.

Associated British Foods Plc (ABF) sank 5.8 percent to 984 pence, the worst performance in the FTSE 100. The owner of Primark clothes stores cut its full-year earnings forecast as profitability at its clothing unit will be lower than anticipated.

The company, which today reported an 8.6 percent increase in first-half revenue, said adjusted earnings will be at a similar level to last year. That compares with a November forecast of “profit growth” for 2011.

ITV Plc (ITV) dropped 3.9 percent to 72.75 pence after rival British Sky Broadcasting Group Plc reached a new agreement to broadcast most of the UEFA Champions League soccer matches until summer 2015. ITV said it retained the rights to show a portion of the games.

The shares also fell after Barclays lowered its recommendation for ITV to “equal weight” from “overweight.”

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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