U.K. Stocks Little Changed on U.S. Industrial-Output Data

U.K. stocks were little changed, with the FTSE 100 (UKX) Index posting a second week of gains, after a report showed that U.S. industrial production unexpectedly declined last month.

Fresnillo Plc climbed 5.3 percent, dragging a gauge of U.K. raw-material producers higher. Mondi (MNDI) Plc rose 5 percent after Bank of America Corp. added South Africa’s biggest packaging company to its list of top European stocks. Wm Morrison Supermarkets Plc (MRW) fell 1 percent after Exane BNP Paribas recommended selling shares of the grocer.

The FTSE 100 added 4.2 points, or less than 0.1 percent, to 6,663.62 at the close in London. The gauge has risen 1.4 percent this week as comments by Federal Reserve Chair Janet Yellen fueled optimism the U.S. economy can withstand reduced monthly bond purchases. The FTSE All-Share Index climbed 0.2 percent today, while Ireland’s ISEQ Index advanced 0.4 percent.

“U.S. industrial production for January was as dismal as most of the recent data,” Rob Carnell, the London-based chief international economist of ING Bank NV, wrote in a note. “It looks awful, but has to be taken with an enormous snow shovel of salt. Unfortunately, with bad weather ongoing in parts of the U.S., it may be some time before the real underlying picture of U.S. economic strength re-emerges.”

U.S. industrial output dropped 0.3 percent in January, according to a Federal Reserve report today. The median forecast in a Bloomberg survey of economists had called for a 0.1 percent advance. Factory production decreased 0.8 percent last month, the biggest decline since May 2009.

Consumer Confidence

Preliminary data showed U.S. consumer confidence was unchanged in February. The Thomson Reuters/University of Michigan index of sentiment remained at 81.2 this month, exceeding the median economist estimate of 80.2.

U.K. stocks earlier rose as much as 0.2 percent after reports showed Germany’s gross domestic product expanded 0.4 percent in the final three months of 2013, more than the 0.3 percent that economists had forecast. The French economy grew 0.3 percent last quarter, according to the Insee. The national statistics institute revised its third-quarter figure to show GDP was unchanged. It had estimated that Europe’s second-largest economy contracted in the three months through September.

“The economic situation in Europe is better than it was two years ago,” said Yves Marcais, an equity-sales trader at Global Equities in Paris. “It may be the beginning of a new takeoff. The situation in Germany is still good. France and Italy have shown improvement, but for me to say the situation is definitely bullish, they need to have more reforms.”

Fresnillo Jumps

Fresnillo (FRES), which mines precious metals in Mexico, climbed 5.3 percent to 971.5 pence, its sixth day of gains. Silver jumped 3.6 percent today, while gold increased 1.1 percent.

Mondi rose 5 percent to 1,028 pence. Bank of America said the packaging and paper company’s control over capital spending should enable it to return more cash to shareholders than analysts have estimated.

Hikma Pharmaceuticals Plc (HIK) rallied 4.7 percent to 1,303 pence. The London-based drugmaker predicted that revenue climbed 23 percent in 2013 because the performance of its generics business improved toward the end of the year. It had forecast sales growth of 20 percent. Hikma reports its full-year results on March 12.

Wm Morrison

Morrison declined 1 percent to 233.8 pence. Exane lowered the shares to underperform and reduced its price estimate by 13 percent to 200 pence. The brokerage said Britain’s fourth-largest supermarket chain will probably not be bought out. Earlier this week, people with knowledge of the matter said the founding family had contacted private-equity funds about taking the retailer private.

“Morrison is hemorrhaging market share and has a pricing problem requiring painful margin cuts to fix,” Exane wrote in a note today.

Vodafone Group Plc (VOD) fell 1.4 percent to 218.4 pence. The telecommunications company’s Indian subsidiary faces increased competition in four major metropolitan areas after Reliance Jio Infocomm Ltd. won spectrum in an auction yesterday. Europe’s largest mobile-phone operator said it spent 1.9 billion pounds ($3.2 billion) buying frequencies at yesterday’s sale.

The number of shares changing hands in FTSE 100-listed companies was 12 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

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

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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