U.K. Stocks Rise After Two Days of Losses; Vodafone Leads
U.K. stocks advanced, snapping two days of declines, as speculation that the Federal Reserve will opt for more stimulus outweighed Fitch Ratings’ decision to downgrade 18 Spanish lenders.
The FTSE 100 Index added 0.8 percent to 5,473.74 at the close of trading in London, after fluctuating between gains and losses at least 11 times. The gauge has fallen 8.2 percent from this year’s high on March 16. The broader FTSE All-Share Index rose 0.5 percent and Ireland’s ISEQ Index dropped 0.4 percent today.
“In the event that Greece turns into a problem I think the Fed will absolutely stand up and say: ‘no need to panic, we’re here and we’re going to stabilize the place,’” Ken Polcari, managing director at ICAP Plc’s equities unit in New York, said in a Bloomberg TV interview.
The Federal Open Market Committee holds its next policy meeting on June 20. Federal Reserve Bank of Chicago President Charles Evans said he would support a variety of measures to generate faster job growth.
Stocks fell 0.1 percent yesterday as initial optimism over Spain’s bailout plan gave way to concern it won’t stop the debt crisis from spreading.
Spanish borrowing costs climbed as European government bonds slumped on concern policy makers aren’t doing enough to prevent the currency bloc’s financial woes from deepening. The yield on Spain’s 10-year bonds rose 20 basis points to 6.71 percent today, after earlier breaching the euro-era record of 6.78 percent reached on Nov. 17.
The gauge rose to minus 16 from minus 19 in April, which was a six-month low, London-based RICS said today, citing a monthly poll of property surveyors. A reading below zero means more surveyors saw price drops than gains last month. A measure of demand fell to a four-month low.
Vodafone added 2.1 percent to 174.70 pence. A gauge of telecom shares was the best performer out of the 19 industry groups on the Stoxx 600 Europe Index.
ICAP, the world’s largest broker of transactions between banks, gained 2.7 percent to 346.5 pence, its biggest gain in six weeks.
Randgold Resources advanced 3 percent to 5,765 pence as gold gained for a third day.
British American Tobacco Plc, Europe’s largest cigarette maker, gained 1.5 percent to 3,156 pence.
Man Group fell 2.9 percent to 74.5 pence, its fourth day of declines.
Evraz Plc (EVR), Russia’s largest steelmaker by output, fell 2.2 percent to 266.7 pence, its lowest price since at least November.
Amlin Plc (AML), the largest Lloyd’s of London insurer by market value, added 1 percent to 326.7 pence. The stock was raised to buy from hold at Deutsche Bank AG, which said that price increases and better underwriting will boost profits.
Taylor Wimpey Plc (TW/), the U.K.’s biggest home builder, dropped 1.9 percent to 44.61 pence, snapping four days of gains. Barratt Developments Plc (BDEV), the second-largest house builder, fell 1.8 percent to 126.9 pence.
International Consolidated Airlines Group SA (IAG) slid 1.8 percent to 143 pence. The parent of British Airways has put acquisition plans on hold as the European debt crisis hurts demand for travel.
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