U.K. stocks advanced for a fourth day as manufacturing expanded more than estimated, and as companies from British Sky Broadcasting Group Plc (BSY) to Lloyds Banking Group Plc (LLOY) rose after posting results.
BSkyB climbed 2.3 percent after Britain’s largest pay-TV broadcaster said nine-month revenue increased 6.6 percent. Lloyds rallied the most in nine months after saying profit jumped 22 percent in the first quarter. Tesco Plc (TSCO) and J Sainsbury Plc (SBRY) fell more than 2 percent after fellow grocer Wm Morrison Supermarkets Plc (MRW) cut prices on 1,200 products.
The FTSE 100 Index (UKX) added 28.84 points, or 0.4 percent, to 6,808.87 at the close in London. The benchmark climbed 2.8 percent in April amid an upsurge in mergers-and-acquisitions activity. The FTSE All-Share Index rose 0.4 percent today, while Ireland’s ISEQ Index slipped less than 0.1 percent.
“The U.K. economy is doing better than other regions and we expect that to continue,” Stewart Richardson, who helps manage about $100 million as chief investment officer at RMG Wealth Management LLP, said by phone. “Some domestic sectors may outperform. Central-bank policy and global growth will be the most important factors for markets.”
Western-European markets were closed for the May Day holiday, with the exception of the U.K., Ireland and Denmark. The volume of shares changing hands in FTSE 100 companies was 21 percent lower than the 30-day average, according to data compiled by Bloomberg.
A purchasing managers’ index of British manufacturing rose to 57.3 in April from a revised 55.8 in March. That beat the median estimate for the Markit Economics report of 55.4. Readings greater than 50 mean that activity increased.
In the U.S., the Federal Open Market Committee reduced its monthly asset purchases to $45 billion, matching the median estimate of economists surveyed by Bloomberg. The central bank said after European markets closed yesterday that the world’s biggest economy has accelerated recently.
BSkyB climbed 2.3 percent to 900.5 pence after saying revenue in the nine months ended March 31 rose to 5.67 billion pounds ($9.6 billion) from 5.31 billion pounds a year earlier. The company also added a net 74,000 TV customers in the third quarter, more than doubling growth from a year earlier.
Lloyds gained 5.5 percent to 79.5 pence as Britain’s biggest mortgage lender said first-quarter pretax profit before one-off items increased to 1.8 billion pounds from 1.48 billion pounds in the year-earlier period. That beat the 1.7 billion-pound estimate of Mark Phin, an analyst at Keefe, Bruyette & Woods in London.
A gauge of banks jumped 1.7 percent, contributing the most to the FTSE 350 Index’s gain. Royal Bank of Scotland Group Plc, which is majority owned by the state, advanced 2.6 percent to 306.6 pence, and Barclays Plc added 1.6 percent to 256.2 pence.
BG Group Plc (BG/) rose 3.3 percent to 1,237.5 pence after interim executive chairman Andrew Gould said he will review the oil producer’s portfolio of assets. The shares climbed to a three-month high on April 29 amid speculation that it could become a takeover target, following Chief Executive Officer Chris Finlayson’s surprise resignation.
The company posted better-than-forecast first-quarter net income today. It also predicted that production will only reach the lower end of its previous forecast of 590,000 to 630,000 barrels of oil equivalent a day because the authorities in Egypt have taken a greater share of BG’s production in the country than they are contractually committed to have.
Salamander Energy Plc (SMDR) jumped 10 percent to 147.5 pence, the highest price since July, after saying it has held formal talks with bidders after receiving approaches to buy some or all of its assets.
Tesco dropped 2.2 percent to 286.6 pence and Sainsbury lost 3.2 percent to 325.1 pence after Morrison, the fourth-largest U.K. supermarket chain, said it would reduce prices on the discounted items by an average of 17 percent from today. The cuts will compel Tesco to follow suit, and may affect Sainsbury, Sanford C. Bernstein & Co. wrote in a note. The brokerage lowered its forecast for Sainsbury’s shares by 20 percent. Morrison fell 1.7 percent to 197.5 pence.
Vodafone Group Plc (VOD) slipped 1.5 percent to 220.7 pence after the Wall Street Journal reported that AT&T has approached DirecTV about buying the satellite-TV company. A deal, worth least at $40 billion, may reduce the likelihood of AT&T buying Vodafone. AT&T ruled out making an immediate bid for the British company in January, responding to speculation that it may do so. That statement prevented the U.S. mobile-phone operator from offering to buy Vodafone until the end of July.
Carclo Plc (CAR) tumbled 27 percent to 131.8 pence after saying lower prices and slower-than-expected volume growth will affect revenue from its touch-sensor business this year and next.
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