U.K. Stocks Gain as Fed Says U.S. Economy Still Growing
U.K. (UKX) stocks gained after the Federal Reserve said the U.S. economy continues to expand and amid speculation that a report in China tomorrow may show the world’s second-largest economy grew faster-than-forecast.
Royal Dutch Shell Plc (RDSA) pared a decline of as much as 5.5 percent today, to close 0.8 percent lower. Europe’s largest oil producer said it has a “high degree of confidence” that its operations aren’t the source of an oil sheen in the Gulf of Mexico. Aggreko Plc (AGK) gained 3.1 percent after reporting a 21 percent increase in underlying revenue in the first quarter. Hays Plc jumped after forecasting full-year operating profit.
The FTSE 100 Index advanced 75.72 points, or 1.3 percent, to 5,710.46 at the close in London, rebounding from an earlier retreat of as much as 0.6 percent. The broader FTSE All-Share Index gained 1.4 percent today, while Ireland’s ISEQ Index increased 1.8 percent.
“Rumors of a stronger Chinese gross domestic product number certainly put a rocket under the FTSE 100 today, but this of course runs the risk of disappointment tomorrow,” said Chris Beauchamp, a market analyst at IG Index in London. “The bulls seem to be fractionally more powerful, having pulled markets back from the post-Easter selloff.”
More Americans than forecast filed claims for jobless benefits last week. Jobless claims increased 13,000 in the week ended April 7 to 380,000, the most since January, the Labor Department reported today in Washington. The median forecast in a Bloomberg News survey had called for 355,000 claims.
Fed’s Beige Book
The Fed said yesterday that the world’s biggest economy maintained its expansion in all 12 of the central bank’s regions as manufacturing, hiring and retail sales showed signs of strength last month.
“The economy continued to expand at a modest to moderate pace from mid-February through late March,” the Fed said in its Beige Book business survey published late yesterday, two weeks before the Federal Open Market Committee meets to debate monetary policy.
Fed Vice Chairman Janet Yellen endorsed the central bank’s view that borrowing costs will probably stay low through 2014.
“I consider a highly accommodative policy stance to be appropriate in present circumstances,” Yellen said yesterday in a speech in New York. She also said that allowing the Fed’s program to extend the maturity of the assets on its balance sheet to expire in June wouldn’t amount to a policy tightening.
China, the world’s largest consumer of copper, will publish its first-quarter GDP release tomorrow. The report may show the economy expanded 8.4 percent from a year earlier, slowing from the fourth quarter’s 8.9 percent increase, according to a survey of economists. The World Bank today cut its estimate for 2012 Chinese growth to 8.2 percent.
Shell retreated 0.8 percent to 2,125 pence as the oil producer investigated the source of a “light sheen” of oil in the Gulf of Mexico.
Aggreko rose 3.1 percent to 2,226 pence after posting increased sales and saying that its order intake remains strong.
Hays (HAS) rallied 8.9 percent to 88.5 pence after forecasting full-year operating profit toward the top end of analysts’ estimates.
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