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U.K. Stocks Little Changed as Investors Weigh U.S. Data

U.K. stocks were little changed at a five-month high as investors weighed worse-than-estimated data on U.S. housing and factory output to gauge when the Federal Reserve will slow the pace of its stimulus.

InterContinental Hotels Group Plc (IHG) dropped 2.3 percent after saying that revenue growth in America slowed. GKN Plc (GKN) lost 2.2 percent after JPMorgan Chase & Co. downgraded automakers. Aggreko Plc (AGK) climbed the most in more than seven months after saying third-quarter revenue and trading margins improved from a year earlier.

The FTSE 100 Index (UKX) added 4.48 points, less than 0.1 percent, to 6,725.82 at the close in London, its highest level since May 28. The gauge rallied 4.1 percent in the past three weeks as corporate earnings beat estimates and U.S. lawmakers reached a last-minute deal to end a fiscal impasse. The broader FTSE All-Share Index was also little changed today and Ireland’s ISEQ Index decreased 0.2 percent.

“The next question is when will the Fed taper,” Bettina Mueller, a senior economist in Frankfurt at Deutsche Asset & Wealth Management, which manages the equivalent of $1.36 trillion, said by telephone. “We probably won’t get any big news, but then speeches will start again and the data that will be published is quite important because it’s data-dependent tapering. October data may be partly distorted because of the shutdown, but after that, we expect the data to recover again.”

Millions of U.K. commuters were advised to stay home as the worst storm in five years forced rail operators across southern Britain to cancel rush-hour services.

Fed Policy

The Federal Open Market Committee will meet Oct. 29-30 to consider when to reduce $85 billion of monthly bond purchases. The officials will decide to wait until March, a Bloomberg survey showed this month. A partial shutdown of the U.S. government because of a fiscal impasse hampered fourth-quarter growth and disrupted the release of economic data, shrinking the room for policy makers to start reducing the pace of stimulus.

A report today showed factory production in the U.S. rose 0.1 percent in September, lower than economists’ forecast of a 0.3 percent increase. Total industrial production, which includes output from mines and utilities, advanced 0.6 percent. The median forecast in a Bloomberg survey of 85 economists called for a 0.4 percent advance in September industrial production.

Fewer Americans than forecast signed contracts to buy previously owned homes in September, the fourth straight month of declines, separate data showed.

Falling Revenue

InterContinental Hotels lost 2.3 percent to 1,823 pence. The owner of the Holiday Inn and Crowne Plaza hotel chains said revenue per available room in the U.S. increased 1.6 percent in September, slower than the trend in the preceding months.

GKN, the automotive-parts supplier, dropped 2.2 percent to 364.1 pence. JPMorgan downgraded automakers to neutral from overweight, meaning investors should hold no more of the shares than are represented in benchmarks.

“Autos are the best-performing sector year-to-date in Europe,” Mislav Matejka, chief European equity strategist at JPMorgan, wrote in a report today. “We think that their earnings momentum could be stalling in the near term,” he wrote.

Aggreko climbed 6 percent to 1,608 pence, its biggest increase since March 14. The world’s largest provider of mobile power generators said revenue and trading margins in the quarter ended September improved from last year. The company said underlying revenues and margins for both the second half and the full year will also grow.

AstraZeneca Plc (AZN) advanced 1.6 percent to 3,301 pence. The U.K.’s second-biggest drugmaker was raised to neutral from underperform by Bank of America Corp., which said a phase of analyst downgrades in earnings estimates is nearing an end and new-product introductions had picked up.

Pendragon Plc (PDG) gained 3.3 percent to 39.75 pence, its highest price since November 2007. Jefferies Group LLC and Numis both raised their estimates for profits at the seller of new and used vehicles after the company said its performance will exceed expectations.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

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

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