U.K. stocks advanced for a fifth day, their longest streak of gains this year, as Federal Reserve Chairman Janet Yellen signaled that she will continue to taper the bank’s asset-purchase program at future meetings.
Marks & Spencer Group Plc (MKS) and Kingfisher Plc each rose more than 3 percent after a release showed British retail sales soared in January. Babcock International Group Plc (BAB) climbed 4 percent after saying its financial performance in the final three months of 2013 matched its forecasts. Barclays Plc (BARC) slid 3.8 percent after reporting increased costs.
The FTSE 100 Index (UKX) advanced 81.11 points, or 1.2 percent, to 6,672.66 at the close in London. The benchmark’s five-day winning streak has pared its slide from this year’s high on Jan. 20 to 2.4 percent. The FTSE All-Share Index also added 1.2 percent today, while Ireland’s ISEQ Index gained 0.8 percent.
“The U.K. economic recovery seems to have taken hold,” Clive Black, head of research at Shore Capital Group Ltd. in London, said. “I don’t think anyone’s dancing around with joy, but most of the indicators are pointing the right way. Quarter on quarter, we’re making economic progress and it’s that and earnings that are dictating where the market goes.”
Yellen, in her first public remarks on monetary policy and the outlook for the U.S. economy, said that the Federal Open Market Committee will probably continue to slow its asset-purchase program this year. The central bank decided last month to reduce its monthly bond buying by $10 billion to $65 billion.
“The committee will likely reduce the pace of asset purchases in further measured steps,” she said in prepared comments. “That said, purchases are not on a pre-set course.”
In the U.K., a British Retail Consortium report showed that same-store retail sales increased 3.9 percent in January from a year earlier. That beat the 0.8 percent median estimate of economists surveyed by Bloomberg. Sales gained 0.4 percent in December at an annualized rate.
An index of general retailers climbed 2.6 percent. M&S, Britain’s largest clothing retailer, added 3.3 percent to 485.6 pence, while Kingfisher rose 3.2 percent to 376.8 pence. Debenhams Plc (DEB), which operates department stores, advanced 5.1 percent to 77.7 pence. Sports Direct International Plc (SPD), which sells sports clothing and equipment, increased 3.4 percent to 708 pence.
Babcock rose 4 percent to 1,395 pence. The engineering company said it continues to experience positive conditions in its markets. Babcock also said that it won or was named as preferred bidder for 700 million pounds ($1.2 billion) of contracts in the last three months of the year.
Fresnillo Plc (FRES), which mines precious metals, jumped 5.7 percent to 911.5 pence. Randgold Resources Ltd. (RRS) and Centamin Plc, which both extract gold in Africa, rose 3.9 percent to 4,705 pence and 6.3 percent to 50.6 pence, respectively.
Kazakhmys Plc (KAZ) surged 18 percent to 208.4 pence after the Kazakh central bank devalued the central Asian republic’s currency. The devaluation of the tenge may increase the copper producer’s earnings before interest, taxes, depreciation and amortization by 53 percent in 2014 because labor is its biggest cost, Bank of America Corp. said today.
Barclays slid 3.8 percent to 264.7 pence. The U.K.’s second-biggest bank by assets said expenses as a proportion of revenue rose to 71 percent in 2013 from 63 percent in 2012. The lender’s core equity tier one ratio -- a measure of financial strength -- declined in the quarter to 9.3 percent, missing some analysts’ estimates. It also said adjusted pretax profit fell to 191 million pounds in the fourth quarter from 1.4 billion pounds a year earlier.
RSA Insurance Group Plc (RSA) lost 3.3 percent to 99.1 pence. Storms and flooding in the U.K. will cost the insurance industry at least 500 million pounds, according to Deloitte LLP. That figure may double if bad weather persists, James Rakow, an insurance partner at the firm, said today.
The volume of shares changing hands on FTSE 100-listed companies was 33 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.
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