U.K. Stocks Are Little Changed; Cove Energy Shares Surge

U.K. stocks were little changed amid reports that showed consumer spending increased for the first time in six quarters, while the economy contracted.

Cove Energy Plc jumped 21 percent after Thailand’s PTT Exploration and Production Plc made a counter offer for the company. Capita Plc rallied 4.1 percent after analysts raised their recommendations on the shares. Lloyds Banking Group Plc (LLOY) retreated 2.3 percent after saying profit will drop this year.

The FTSE 100 Index fell 2.76, less than 0.1 percent, to 5,935.13 at the close in London, as three shares rose for every two that fell. The benchmark gauge has still gained 0.5 percent this week as China cut banks’ reserve requirements and Greece won a second bailout. The FTSE All-Share Index lost less than 0.1 percent today, while Ireland’s ISEQ Index added 0.9 percent.

“The muted finish for markets today is a good proxy for how this week has played out,” said David Jones, chief market strategist at IG Index. “While the FTSE remains resolutely up, it is clear that this week has seen some of the positive momentum start to fade away.”

Consumer spending rose 0.5 percent in the fourth quarter, the Office for National Statistics said in London today. That exceeded the 0.2 percent increase predicted by economists in a Bloomberg survey.

U.K.’s gross domestic product dropped 0.2 percent from the third quarter, a report showed, the same as previously estimated.

Of the 16 FTSE 100 (UKX) companies that have posted quarterly earnings since Jan. 9, as many as 14 exceeded estimates, while two missed projections, data compiled by Bloomberg show.

U.S. Economy

U.S. consumer sentiment rose more than expected in February. The Thomson Reuters/University of Michigan final index of consumer sentiment rose to 75.3, exceeding a reading of 73 projected by economists in a Bloomberg survey. In a separate report, purchases of new houses in the world’s largest economy beat forecasts. Sales were at 321,000 annual pace, compared with the 315,000 projected by economists in a Bloomberg News survey.

Germany’s economy shrank 0.2 percent in the fourth quarter, the Federal Statistics Office said today, confirming an initial estimate published on Feb.15.

Cove Energy Plc (COV) soared 21 percent to 235 pence, extending its weekly gain to 58 percent. PTT Exploration and Production Pcl, Thailand’s only listed oil and gas explorer, proposed to buy the company at 220 pence a share, topping a previous offer from Royal Dutch Shell Plc. (RDSA)

Shell dropped 0.3 percent to 2,322 pence, erasing an earlier gain of as much as 0.9 percent.

Capita, Berendsen

Capita climbed 4.1 percent to 747.5 pence after Oriel Securities raised its recommendation on the shares to “hold” from “reduce” and Goldman Sachs said the stock looked “inexpensive.”

BG Group Plc (BG/) added 1.3 percent to 1,543 pence after the company said it is considering selling a 20 percent stake in a terminal in Chile. BG owns 40 percent stake in the terminal.

Ophir Energy Plc surged 14 percent to 426 pence, while Premier Oil Plc (PMO) increased 1.8 percent to 449.7 pence.

Berendsen jumped 8.2 percent to 500 pence, the biggest increase since June 2009, after the company reported earnings that beat estimates.

Hammerson, Lloyds

Hammerson Plc (HMSO), Britain’s third-largest real-estate investment trust, rose 3.7 percent to 400.1 pence after announcing a plan to sell its office portfolio and invest the proceeds in shopping malls. The company posted full-year net income that exceeded analyst estimates.

Lloyds, the U.K.’s largest mortgage provider, lost 2.3 percent to 35.73 pence. The net loss for 2011 widened to 2.8 billion pounds ($4.4 billion), missing the average 2.41 billion- pound estimate in a Bloomberg survey.

Unilever Plc dropped 1.9 percent to 2,050 pence. Rival Procter & Gamble’s renewed emerging market focus on home and personal-care products category in the emerging markets is a “key worry” for Unilever, Exane BNP Paribas said in a note.

Reckitt Benckiser Group Plc (RB/) declined 2.3 percent to 3,421 pence after Goldman Sachs downgraded its rating to “neutral” from “buy.”

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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

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