U.K. stocks climbed, rebounding from the lowest level this year, as mining companies and banks rallied after Alcoa Inc. kicked of the U.S. earnings season with an unexpected first-quarter profit.
Kazakhmys Plc (KAZ) and Antofagasta Plc (ANTO) rose with copper. Barclays Plc advanced 2.8 percent as HSBC Holdings Plc (HSBA) strategists upgraded European banks. G4S (GFS) Plc increased 2.6 percent after Morgan Stanley recommended the security company. BT Group (BT/A) Plc and Michael Page International Plc (MPI) declined.
The FTSE 100 Index (UKX) added 39.19, or 0.7 percent, to 5,634.74 at the close in London. The gauge sank 2.2 percent yesterday amid renewed concern about Europe’s debt crisis and worse-than- forecast U.S. jobs data. The broader FTSE All-Share Index also climbed 0.7 percent, while Ireland’s ISEQ Index slid 0.1 percent in Dublin.
“Traders are breathing a deep sigh of relief as yesterday’s rout seems to have come to an abrupt end,” said Manoj Ladwa, a senior trader at ETX Capital in London. “Alcoa reported well last night and investors have stepped in to pick up cheap stocks.”
The FTSE 100 swung between gains and losses at least 10 times today. The number of shares in the index changing hands was 18 percent greater than the average over the past 30 days, data compiled by Bloomberg showed.
Alcoa kicked of the U.S. reporting season with an unexpected first-quarter profit after orders rose and as the largest U.S. aluminum producer closed its higher-cost smelting capacity. Alcoa was the first company in the Dow Jones Industrial Average (INDU) to report results from last quarter.
Kazakhmys, Rio Tinto
Mining companies advanced as copper gained in London. Kazakhmys increased 1.9 percent to 869 pence, Antofagasta gained 3.5 percent to 1,110 pence and BHP Billiton Ltd. climbed 1.3 percent to 1,855.5 pence.
A gauge of U.K.-listed mining companies yesterday sank 3.9 percent as copper fell on a report that China, the world’s largest user, imported less metal last month.
Barclays paced a rally in European banks, climbing 2.8 percent to 212.1 pence as Investec Plc raised its recommendation for Britain’s second-largest lender by assets to buy from hold.
Separately, HSBC upgraded European banks to overweight for the first time in four years, meaning investors should own more shares in the industry than are represented in benchmark indexes. HSBC strategist Peter Sullivan said European bank earnings could have “bottomed” so long as the euro area’s economy doesn’t contact by more than 2 percent in 2012.
Lloyds Banking Group Plc (LLOY) rallied 2.7 percent to 30.59 pence, Standard Chartered Plc (STAN) gained 0.8 percent to 1,493.5 pence and HSBC, Europe’s largest bank, advanced 0.7 percent to 540.9 pence.
A gauge of U.K. banks stocks increased 1.2 percent, rebounding from a four-day retreat.
G4S surged 2.6 percent to 280.1 pence as Morgan Stanley raised its recommendation for the world’s largest security company to overweight, the equivalent of a buy rating. The analysts cited “an impressive recent win rate and a strong bid pipeline in U.K government outsourcing.”
BT Group paced declining shares, falling 2.5 percent to 213.2 pence. JPMorgan Chase & Co. downgraded the U.K.’s largest phone company to neutral from overweight, saying BT is unlikely to raise its dividend in the short term. The brokerage also said regulatory hurdles may prompt the company to reduce its full- year sales guidance on May 10.
Michael Page sank 3.6 percent to 437.8 pence even after the recruitment company reported a 6.8 percent increase in first- quarter gross profit to 136 million pounds ($216 million).
“Markets continue to be weak and visibility remains limited,” Michael Page said in a statement today.
Investec lowered its recommendation for the shares to hold from buy, citing the stock’s strong performance over the past three months.
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