U.K. Stocks Rise on U.S. Job, Confidence Data; IAG Shares Rally
Dec. 22 (Bloomberg) -- Roger Carr, president of the Confederation of British Industry, talks about the outlook for the U.K. economy and exports and the country's ties in Europe. He speaks with Owen Thomas on Bloomberg Television's "The Pulse." (Source: Bloomberg)
U.K. stocks (UKX) rallied the most this month after U.S. jobs and consumer-confidence data indicated the world’s largest economy is recovering.
Royal Bank of Scotland Group Plc (RBS) led a rally in banks, climbing 4 percent. International Consolidated Airlines Group SA jumped 3.3 percent after reaching a binding agreement to buy Deutsche Lufthansa AG’s BMI unit.
The benchmark FTSE 100 Index gained 67.23, or 1.3 percent, to 5,456.97 at the close in London, the largest advance since Nov. 30. The gauge has still lost 7.5 percent this year amid concern that the euro-area debt crisis will weaken global growth. The broader FTSE All-Share Index climbed 1.2 percent today, while Ireland’s ISEQ Index increased 0.9 percent.
“Encouraging data has assisted with today’s rally,” said Angus Campbell, head of sales at Capital Spreads in London. “A word of caution comes with today’s move higher however as it was on the back of very low volumes.”
Stocks climbed as U.S. jobless claims fell to the lowest level since April 2008, a sign that America’s labor market is strengthening heading into 2012. Separately, the Thomson Reuters/University of Michigan final index of consumer sentiment increased to 69.9 in December from a previous estimate of 67.7.
U.K. GDP Growth
U.K. economic growth accelerated more than previously estimated in the third quarter in an increase that the Bank of England says is unlikely to be repeated as the euro area’s debt crisis curbs bank lending and dents confidence.
Gross domestic product rose 0.6 percent from the previous quarter, faster than the 0.5 percent previously estimated, the Office for National Statistics said today in London.
European Central Bank President Mario Draghi and Bank of England Governor Mervyn King spoke at a press conference in Frankfurt today after a meeting of the European Systemic Risk Board. King said that Europe’s debt crisis is spilling over into the real economy and the outlook for financial stability has worsened.
RBS led a rally in banks today, climbing 4 percent to 20.61 pence. Barclays Plc (BARC) gained 2.4 percent to 176.1 pence and HSBC Holdings Plc (HSBA) advanced 1.8 percent to 488.55 pence.
IAG rose 3.3 percent to 149.9 pence after agreeing to buy Lufthansa’s BMI unit in the U.K. for 172.5 million pounds ($270.5 million), fending off a counterbid from Virgin Atlantic Airways Ltd. IAG said the acquisition will boost its operating profit by 100 million euros in 2015.
Elsewhere, Stagecoach Group Plc, the operator of Britain’s biggest rail-commuter franchise, retreated 3.4 percent to 260.9 pence after JPMorgan Chase & Co. lowered its recommendation (SGC) for the company to “underweight” 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
Rate this Page