U.K. Stocks Climb as U.S. Durable Goods Beat Estimates

U.K. stocks rose, extending their highest level since May 2008, as a report showed that durable- goods orders in the U.S., Britain’s biggest trading partner, rose at a faster rate than economists had estimated.

HSBC Holdings Plc and Barclays Plc (BARC) led banks higher as they each advanced at least 1 percent. Premier Foods Plc (PFD) tumbled 12 percent after the company said Michael Clarke has resigned as chief executive officer.

The FTSE 100 added 9.96 points, or 0.2 percent, to 6,294.41 at the close in London. The equity benchmark has gained 6.7 percent so far in 2013, its best start to a year since 1989, as U.S. lawmakers agreed on a compromise budget. The broader FTSE All-Share Index rose 0.1 percent today, while Ireland’s ISEQ Index was little changed.

“People are wary of further advances because markets have risen an awful lot in a very short period of time,” Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England, said in a telephone interview. “There’s also a pause because a lot of U.S. companies are reporting earnings this week and investors are waiting for that.”

In the U.S., orders for durable goods climbed 4.6 percent in December, exceeding the median economist estimate for a gain of 2 percent. They increased 0.7 percent in November.

A separate report showed pending sales of houses declined last month for the first time since August. The index of contracts for the purchase of previously owned homes fell 4.3 percent after a revised 1.6 percent increase in November, the National Association of Realtors said. Economists had called for the gauge to be unchanged.

Chinese Profits

In China, industrial companies’ profits rose 17 percent to 895 billion yuan ($144 billion) in December from a year earlier, the National Bureau of Statistics said yesterday in Beijing.

A gauge of banks in the FTSE 350 Index rose 0.8 percent. HSBC Holdings Plc (HSBA), Europe’s biggest lender, added 1 percent to 717.1 pence for the largest contribution to the FTSE 100’s advance. Barclays Plc gained 1.7 percent to 305.9 pence.

Goldman Sachs Group Inc. raised its price target on the shares of both lenders. The brokerage said that the Financial Services Authority will probably find no capital shortfall at HSBC when it conducts a regulatory exercise. Goldman Sachs said Barclays can attract additional capital if needed without having to dilute its existing shareholders.

Premier Foods

Premier Foods slumped 12 percent to 106 pence after the owner of the Hovis bread and Bisto gravy brands said Gavin Darby will replace Clarke as CEO from Feb. 4. Martin Deboo, an analyst at Investec Plc, put his buy recommendation on the shares under review, saying that the leadership change failed to help the company’s growth prospects.

“The loss of CEO Mike Clarke is a major blow to Premier Foods,” Credit Suisse Group AG analysts led by Charlie Mills said in a note.

Ryanair Holdings Plc (RYA) slipped 2.1 percent to 5.39 euros in Dublin. Europe’s biggest discount airline forecast net income of 540 million euros ($727 million) in the year ending March 31. JPMorgan Chase & Co. said in a note that the full-year projection may disappoint investors.

EasyJet Plc (EZJ) lost 1 percent to 935.5 pence after the company said Mike Rake will step down as chairman and non-executive director in the summer. The board has begun to review internal and external candidates to replace him, the airline said.

The volume of shares changing hands in companies listed on the FTSE 100 (UKX) was 5.6 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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

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