U.K. Stocks Extend Four-Month High; BSkyB Shares Advance

U.K. stocks rose, extending a four- month high, as cooling Chinese inflation increased speculation that policy makers will do more to stimulate the world’s second- biggest economy.

British Sky Broadcasting Group Plc gained 1.2 percent after winning an appeal against a regulator’s decision that it must make its sports channels available to competitors at a set price. Amec (AMEC) Plc slumped the most since October after saying revenue growth will weaken in the second half.

The benchmark FTSE 100 Index rose 5.59 points, or 0.1 percent, to 5,851.51 at the close in London, the highest since April 2. The gauge has surged 11 percent from its June 1 low amid optimism that central banks will introduce more measures to stimulate growth. The broader FTSE All-Share Index also gained 0.1 percent today, while Ireland’s ISEQ Index added 1 percent.

“There’s a sector rotation going on,” said Graham Bishop, an equity strategist at Exane BNP Paribas in London. “Investors are coming back into cyclical stocks such as banks, miners and capital goods. Share prices are being driven more by tail-risk mitigation, rather than earnings momentum.”

China’s consumer prices rose 1.8 percent from a year earlier, the National Bureau of Statistics said in Beijing. That compared with the 1.7 percent median forecast of 33 economists in a Bloomberg survey and a 2.2 percent gain in June.

Chinese Economy

Slower consumer-price inflation fueled speculation that policy makers may add further measures to reverse the economic slowdown. The leaders of the ruling Communist Party last week pledged to keep adjusting policies to ensure the economy expands at a stable rate this year.

U.S. jobless-benefit claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today. The median forecast of 43 economists surveyed by Bloomberg called for a reading of 370,000.

The volume of shares changing hands on the FTSE 100 (UKX) was 22 percent lower than the average of the last 30 days, according to data compiled by Bloomberg. Britain’s Nicola Adams today became the first woman boxer to win Olympic gold, bringing the nation’s tally of gold medals to 24.

“With traders around the City glued to their screens watching Team GB steadily accumulate more medals, the atmosphere in the markets is almost deathly quiet,” said David Jones, chief market strategist at IG Index in London.

BSkyB Rises

BSkyB (BSY), the U.K.’s biggest pay-television provider, gained 1.2 percent to 752 pence. Media regulator Ofcom “misinterpreted” evidence on BSkyB’s negotiations with rivals when it ordered the company in 2010 to ease access to its sports channels, which broadcast popular soccer games, the Competition Appeal Tribunal ruled today in London.

BT Group Plc (BT/A), the telecommunications company that has rights to broadcast Premier League soccer from the 2013-14 season, slid 2.4 percent to 216.3 pence.

Standard Chartered Plc (STAN) increased 3.6 percent to 1,363 pence as Chief Executive Officer Peter Sands hit back at a New York regulator’s claims the bank broke U.S. sanctions, and said he saw “no grounds” for revoking the lender’s license.

The bank is rising for a second day after plunging 16 percent on Aug. 7 after it was accused of violating U.S. money laundering laws over its dealings with Iranian banks.

“We reject the position and portrayal of facts by the department,” Sands said on a conference call with reporters yesterday. “It would be disproportionate and wholly inconsistent with the actions of other U.S. authorities in other sanctions matters” to revoke the bank’s New York license, he said.

Amec Drops

Amec retreated 4.8 percent to 1,103 pence, the biggest drop since Oct. 4. The U.K.-based oil and gas engineer said revenue growth will weaken in the second half, and profit margins will be lower than a year earlier.

Enterprise Inns Plc (ETI), a U.K. operator of leased and tenanted pubs, rallied 7.7 percent to 59.75 pence, the biggest gain since February. The company said business in the 44 weeks to Aug. 4 “continued its improving trend toward growth.”

Shares of competitor Punch Taverns Plc (PUB) advanced 7.5 percent to 6.56 pence.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

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

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