U.K. stocks rose for a fourth day as a report showed U.S. house prices fell at a slower rate and speculation mounted that China’s government will increase stimulus to support the world’s second-largest economy.
Rio Tinto Group and BHP Billiton Ltd. (BHP) advanced. Greggs Plc (GRG), a maker of Cornish pasties, jumped the most in 15 years after the U.K.’s government reversed a plan to tax hot baked food. Wolseley Plc (WOS) declined after the seller of plumbing supplies reported that third-quarter revenue fell.
The FTSE 100 Index (UKX) increased 0.7 percent to 5,391.14 at the close in London, its longest streak of gains this month. The volume of shares changing hands was 13 percent lower than the average of the last 30 days, according to data compiled by Bloomberg. The FTSE All-Share Index also rose 0.7 percent today, while Ireland’s ISEQ Index gained 1.1 percent.
House prices in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year as lower borrowing costs and an improving job market gave sales a boost.
The S&P/Case-Shiller index of property prices slipped 2.6 percent from a year earlier, the group reported today in New York. The decline matched the median forecast of economists surveyed by Bloomberg News. A measure of consumer confidence in the country for May missed economists’ expectations.
FTSE 100’s Performance
The FTSE 100 has retreated 9.6 percent from its 2012 high on March 16 as Greece failed to form a government and borrowing costs for Spain surged. The gauge posted its first weekly gain in a month last week as China pledged to support growth. A selloff from the start of May left the benchmark at its cheapest valuation since November.
China’s finance ministry announced subsidies for energy- saving products yesterday. Separately, an official said that the government has agreed to revive incentives for car buying. That added to stimulus Credit Suisse Group AG said may total as much as 2 trillion yuan ($315 billion).
“The stimulus programs can hold the slide in growth and investment demand, but they are probably not enough to stage a 2009-style rebound,” wrote Dong Tao, an economist at Credit Suisse in Hong Kong, in a report dated yesterday. He reiterated a forecast that China’s gross domestic product will expand by 8 percent this year.
China Stimulus Intentions
China has no intention of introducing large-scale stimulus like it did during the global financial crisis, the Xinhua News Agency said today. The Chinese government announced a package of 4 trillion yuan in 2008.
Spain reported today that retail sales in the country slumped 11 percent in April from a year earlier.
Greggs rallied 8.1 percent to 504.5 pence, the biggest advance since March 1997. U.K. Chancellor of the Exchequer George Osborne reversed a plan to make pasties subject to value- added tax, one of the most controversial measures in his March 21 budget. The government had intended to tax the snacks at the same rate as other hot takeaway food.
Wolseley declined 1 percent to 2,277 pence, after earlier tumbling 5 percent. The distributor of bathroom materials, heating and plumbing supplies reported that third-quarter revenue dropped to 3.2 billion pounds ($5 billion) from 3.27 billion pounds in the year-earlier period.
Johnson Matthey Rises
Johnson Matthey Plc (JMAT), the pollution control specialist that makes a third of all autocatalysts, added 2.4 percent to 2,221 pence. Credit Suisse today advised buying the shares before the company reports its fiscal annual results in June. The brokerage has a price estimate of 2,400 pence per share.
International Consolidated Airlines Group SA (IAG) gained 4.1 percent to 142.7 pence, paring its decline since April 2 to 25 percent. Analysts at UBS AG advised buying shares in the owner of British Airways, saying investors have already priced in concern that Spanish shareholder Bankia SA may sell its stake.
Volex Plc (VLX), the London-based maker of power products, surged 12 percent to 247.75 pence for the largest rally on the FTSE All-Share. (ASX) The company reported an increase in annual profit and forecast growth in revenue and profitability over its next fiscal year.
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