U.K. Stocks Extend Five-Year High as Next, Sage Advance

U.K. stocks climbed, extending the the highest level for the FTSE 100 (UKX) Index in more than five years, as companies from Next Plc (NXT) to Sage Group Plc reported results.

Next rallied 4.4 percent to the highest since at least 1988 after Britain’s second-largest clothing retailer posted sales that beat analyst estimates. Sage Group Plc gained 2.3 percent as the software maker said it on track to meet its full-year expectations. Standard Chartered Plc (STAN) led declining shares, falling 4.4 percent, after reporting lower profit.

The FTSE 100 added 26.18 points, or 0.4 percent, to 6,583.48 at the close in London, its highest level since November 2007, as optimism grew central banks will maintain monetary support to drive economic growth. The broader FTSE All-Share Index also increased 0.4 percent today, while Ireland’s ISEQ Index lost 0.8 percent.

“The market can continue to go higher until such time as central-bank stimulus is removed,” Jeremy Batstone-Carr, head of research at Charles Stanley Group Plc in London, said in a telephone interview. “Macro economic data is of lesser significance” than the Federal Reserve’s monetary policy, he said.

The Bank of England is forecast to leave its stimulus program on hold tomorrow amid signs the economic recovery has found a firmer footing. A Bloomberg News survey of economists shows policy makers will refrain from expanding the bank’s quantitative easing beyond 375 billion pounds ($582 billion).

Next Sales

Next advanced 4.4 percent to 4,601 pence, its highest price since at least September 1988. The retailer said Next brand sales rose 2.2 percent in the 14 weeks ended May 4. That compared with the 1.1 percent median estimate of 11 analysts compiled by Bloomberg, and growth of 3.9 percent in the previous quarter. Directory catalog and online sales increased 8.9 percent, while retail sales fell 1.9 percent.

Sage Group gained 2.3 percent to 347 pence after the software maker reported a 5 percent increase in first-half revenue to 708.1 million pounds ($1.1 billion) and said it is confident it will deliver on strategic and financial goals for the year. The company also proposed a 3.69 pence interim dividend.

Melrose Industries Plc (MRO) rallied 2.7 percent to 251.8 pence after the engineering company said it was confident of meeting full-year targets with trading so far this year in line with expectations. The company also said results at its Elster energy business, which it acquired in 2012, were “significantly ahead” of the same period last year.

Evraz Rating

Evraz Plc (EVR) jumped 3.1 percent to 171.4 pence. Barclays Plc raised its recommendation for the mining company to equal weight from underweight, meaning investors should buy shares to the equal the company’s weighting in benchmark indexes.

Standard Chartered dropped 4.4 percent to 1,625 pence, for the biggest decline on the FTSE 100. The U.K.’s second-largest bank by market value said operating profit in the first quarter declined as wholesale banking revenue fell. The stock had climbed 5.1 percent in the previous four days.

CRH Plc (CRH) lost 3.6 percent to 1,384 pence in London after the Dublin-based company said cold weather and a challenging economic environment had a “significant impact” on construction in its major markets. Like-for-like sales fell 12 percent in the period from January to April from a year earlier.

J Sainsbury Plc (SBRY) dropped 3.9 percent to 381 pence after the U.K.’s third-largest supermarket company predicted a slowdown in sales growth after a year of outpacing its main competitors.

A stagnant economy and a smaller contribution from store extensions will limit same-store revenue growth to between 1 percent and 1.5 percent in the fiscal year ending March 2014, the company said today. That compares with last year’s 1.8 percent gain on a basis that excludes gasoline.

InterContinental Hotels Group Plc (IHG) fell 2.5 percent to 1,912 pence even as the world’s largest provider of hotel accommodation increased first-quarter revenue per room by 3.1 percent from a year earlier. The stock has still climbed 10 percent so far this year.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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

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