U.K. Stocks Little Changed as U.S. Slowdown Offsets Shell

U.K. stocks were little changed, with the FTSE 100 (UKX) Index capping a monthly gain, as data showed U.S. economic growth slowed in the weather-beaten first quarter, offsetting a rally in Royal Dutch Shell Plc.

Shell posted its biggest increase in two years after quarterly profit fell less than analysts had predicted. Rolls-Royce Holdings Plc climbed 2.8 percent after saying it’s in talks to sell power-generation assets to Siemens AG. Heritage Oil Plc surged 23 percent after Qatar’s royal family offered to buy the company for 924 million pounds ($1.56 billion). British American Tobacco Plc (BATS) dropped 2 percent after first-quarter sales growth missed projections.

The FTSE 100 rose 10.12 points, or 0.2 percent, to 6,780.03 at the close of trading in London. The gauge advanced 2.8 percent in April amid better-than-estimated U.S. economic data and an increase in mergers and acquisitions. The FTSE All-Share Index added less than 0.1 percent today, while Ireland’s ISEQ Index climbed 0.4 percent, paring its first back-to-back monthly losses since May 2012.

“It feels like we won’t reach previous growth heights and I’m less jubilant about this cycle,” Ros Price, who helps oversee about 6 billion pounds as chief investment strategist at Seven Investment Management Ltd., said by phone from London. “Still, the Fed is withdrawing liquidity but very slowly. There’s still a lot of money in the market and investor behavior is quite positive, though geopolitical risks are rising.”

Stimulus Reduction

The Fed will probably cut bond buying to $45 billion at the end of a two-day policy meeting, according to the median of economists’ estimates compiled by Bloomberg. The central bank reduced asset purchases in March to a monthly pace of $55 billion from $85 billion in December.

The world’s largest economy expanded at a 0.1 percent annualized rate from January through March, slowing from a 2.6 percent gain in the prior quarter, figures from the Commerce Department showed. The median forecast in a Bloomberg survey called for a 1.2 percent increase. Separate data from the ADP Research Institute showed companies added 220,000 workers to payrolls in April, the most since November. That compares with the 210,000 projected by economists in a Bloomberg survey.

In the U.K., a report showed consumer confidence rose this month to its highest level since June 2007. A sentiment index compiled by GfK NOP Ltd. increased 2 points to minus 3, the London-based research group said today. The median economist forecast compiled by Bloomberg was for a reading of minus 4. The gauge increased from minus 27 a year ago.

Shell Earnings

Shell rose 2.9 percent to 2,347 pence in London trading. First-quarter profit excluding one-time items and inventory changes fell to $7.3 billion from $7.5 billion a year earlier, the company said in a statement. That beat the $5 billion average estimate of 12 analysts surveyed by Bloomberg.

Rolls-Royce gained 2.8 percent to 1,050 pence, paring its decline this year to 18 percent. The company said its plan to sell assets to Siemens includes the energy gas-turbine and compressor business.

Heritage Oil jumped 23 percent to 315.2 pence, its biggest rally since May 2009 and the highest price in three years. The board of the exploration and production company founded by Tony Buckingham approved an offer from Al Mirqab Capital SPC to take over Heritage for 320 pence a share.

Ladbrokes Plc jumped 6.9 percent to 153.3 pence, reversing an earlier loss, as U.K. Sports Minister Helen Grant submitted a written statement to parliament on government plans to restrict fixed-odds betting in gambling shops. William Hill Plc rose 4.5 percent to 354.7 pence.

British American Tobacco fell 2 percent to 3,417 pence. Europe’s biggest maker of cigarettes said first-quarter sales rose 2 percent at constant exchange rates. That trailed the 4 percent analyst projection in a Bloomberg survey.

GlaxoSmithKline Plc slipped 2 percent to 1,632 pence. The U.K.’s biggest drugmaker posted a 10 percent drop in first-quarter sales to 5.61 billion pounds, missing the 5.82 billion pounds predicted by analysts.

Standard Life Plc declined 1 percent to 382.2 pence. U.K. annuity sales slumped 50 percent since Chancellor of the Exchequer George Osborne announced changes to annuity rules in his budget speech last month, the insurer said.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

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

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