U.K. stocks were little changed as minutes from the Federal Reserve’s last meeting signaled policy makers may slow the pace of bond purchases in coming months and as Chinese manufacturing expanded slower than forecast.
Vodafone Group Plc rose after Chief Executive Officer Vittorio Colao said the company is open to potential bidders. Johnson Matthey Plc (JMAT) gained 3.8 percent after posting better-than-forecast profit and raising its dividend. British American Tobacco Plc (BATS) and Imperial Tobacco Group Plc (IMT) lost at least 2 percent as American peer Philip Morris International Inc. forecast 2014 profit growth below its long-term target.
The FTSE 100 Index (UKX) added 0.25 point, less than 0.1 percent, to 6,681.33 at the close in London. The benchmark gauge has dropped 0.2 percent this week, heading for a third week of losses. It has climbed 13 percent this year as central banks maintained stimulus measures to support the global economy. The broader FTSE All-Share Index (ASX) and Ireland’s ISEQ Index were also little changed today.
“The minutes from the FOMC were more hawkish than people had imagined they would be,” Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England, said by phone. “Markets are doing relatively well, considering the negative tone of the FOMC. Traditionally, markets go up going into Christmas. Unless we get tapering in December to upset the apple cart, markets may carry on going up.”
In the U.S., minutes from the Federal Open Market Committee’s Oct. 29-30 meeting released late yesterday showed policy makers may slow the pace of the $85 billion monthly asset purchases if the economy improves as anticipated. The median estimate of economists in a Bloomberg survey calls for the Fed to pare stimulus to $70 billion at the March 18-19 meeting.
FOMC members “generally expected that the data would prove consistent with the Committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months,” according to the minutes.
In China, the preliminary reading of a purchasing managers’ index of manufacturing for November was 50.4, according to HSBC Holdings Plc and Markit Economics. That missed the 50.8 median estimate of analysts surveyed by Bloomberg and compares with a final reading of 50.9 for October. Readings above 50 signal expansion.
Vodafone, which has a 6.5 percent weighting on the FTSE 100, gained 1.2 percent to 229.95 pence as CEO Colao said Europe’s biggest wireless carrier is open to potential buyers. AT&T Inc. executives are discussing internally a possible acquisition of Vodafone, people familiar with the matter told Bloomberg News this month.
“We have a strategy and we are putting a lot of money into it, but if somebody comes and says, ‘You have really beautiful assets,’ then I will agree,” Colao said yesterday at an investor conference in Barcelona.
Johnson Matthey climbed 3.8 percent to 3,210 pence, the highest price since at least 1989, after reporting first-half pretax profit of 212.9 million pounds, exceeding the 206.7 million-pound prediction of analysts surveyed by Bloomberg. The producer of a third of the world’s auto-catalysts increased its half-year dividend to 17 pence per share, from 15.5 pence a year earlier.
“There are signs of the European car market bottoming out,” Finance Director Robert Macleod said. “It’s hard not to be more bullish than we have for many, many years because the car market has been dropping like a stone for the last four or five years.”
AstraZeneca Plc advanced 2.8 percent to 3,400.5 pence after Citigroup Inc. said the drugmaker may focus on mergers and acquisitions in 2014. A purchase of Actelion Ltd. and a restructuring of its joint venture with Bristol-Myers Squibb Co. could increase earnings per share by as much as 24 percent without a risk to dividend, analysts led by Andrew Baum wrote in a note.
BAT declined 2.4 percent to 3,281 pence and Imperial fell 2.6 percent to 2,367 pence. Philip Morris, the world’s largest publicly traded tobacco company, said yesterday its per-share profit excluding currency swings will rise 6 percent to 8 percent in 2014, lower than its long-term target of 10 percent to 12 percent. The forecast suggests the cost of competing may increase for BAT and Imperial, Citigroup wrote in a note.
Vedanta Resources Plc (VED) slipped 2.9 percent to 923 pence and Fresnillo Plc lost 4.5 percent to 863.5 pence. A gauge of mining companies on the FTSE 350 Index declined 1.5 percent.
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