U.K. Stocks Climb for Third Day on China Economy
U.K. stocks advanced, posting the biggest three-day rally since early January, as a report showed Chinese imports increased more than forecast and as U.S. equities surged to a record.
EasyJet (EZJ) Plc jumped the most in a year as Citigroup Inc. advised investors to buy shares in the discount carrier. International Consolidated Airlines Group SA (IAG) added 5.8 percent after the board of Vueling Airlines SA supported its takeover bid. Vedanta Resources Plc (VED) climbed 5.7 percent after reporting an increase in oil and gas production.
The FTSE 100 Index (UKX) rose 74.16 points, or 1.2 percent, to 6,387.37 at the close of trading in London, bringing the three- day advance to 2.2 percent. The gauge has rallied 8.3 percent this year as U.S. lawmakers agreed on a compromise budget and data fueled optimism the world’s biggest economy is recovering. The broader FTSE All-Share Index also added 1.2 percent today, and Ireland’s ISEQ Index gained 1.8 percent.
“Chinese import numbers have got investors thinking that China has become successful at boosting domestic demand,” said Michael Hewson, a market analyst at CMC Markets Plc in London. “The volume is not what I would suggest is dynamic. I certainly don’t think it’s a move that reflects an awful lot of conviction. Having said that, you can’t buck the market. The momentum is basically with the bulls and you’d be foolish to go against that.”
The volume of shares changing hands in companies on the FTSE 100 was 9.3 percent less than the average of the past 30 days, data compiled by Bloomberg showed.
China’s imports rose by a better-than-forecast 14.1 percent in March while export growth slowed to 10 percent from a year earlier, the customs administration said in Beijing.
In the U.S., the Standard & Poor’s 500 Index (SPX) climbed to its highest intraday level ever today. Stocks rose even as minutes from last month’s Federal Reserve meeting showed several officials said the central bank should begin tapering its quantitative easing program later this year.
The Federal Open Market Committee members “thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end,” according to the record of the March 19-20 FOMC meeting.
EasyJet gained 6.7 percent to 1,090 pence, rising for the first time in six days. The stock was raised to buy from neutral at Citigroup, which said it expects earnings per share at the discount carrier to increase around 30 percent in 2013 and the company’s cash flow will lead to dividend growth.
IAG added 5.8 percent to 250.9 pence, the biggest increase since February. The British Airways parent won backing for its bid for Vueling from the Spanish discount carrier’s board after it raised the offer by 32 percent to 9.25 euros a share. The board rejected an earlier offer valued at 7 euros.
Vedanta Resources surged 5.7 percent to 1,179 pence, a one- month high. The producer of energy and metals in India said full-year oil and gas output rose 19 percent.
Eurasian Natural Resources Corp. and Kazakhmys Plc (KAZ) jumped 3.8 percent to 269.9 pence and 4.3 percent to 410.4 pence, respectively.
Evraz Plc (EVR), Russia’s biggest steelmaker, added 4.1 percent to 209.7 pence, advancing for a third day.
Barclays Plc increased 4.3 percent to 298.25 pence, the biggest advance in almost two months. Sanford C. Bernstein & Co. said first-quarter earnings at U.K. banks will be supported by strong capital markets and investment-banking performance.
Royal Bank of Scotland Plc gained 4.2 percent to 285.4 pence and Lloyds Banking Group Plc rose 2.5 percent to 48.36 pence.
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