U.K. stocks climbed, closing near their highest level since December 1999, on bets that the U.S. will rebound from the harsh winter that slowed the world’s largest economy for the first time in three years.
IMI Plc added 3 percent as UBS AG recommended buying the engineering company’s shares. Man Group Plc rose 5 percent after saying it has held talks to buy Boston-based money manager Numeric Holdings LLC. Kingfisher Plc fell the most since September 2011 after quarterly profit missed estimates and profitability dropped in the U.K. and Ireland. Aggreko Plc slipped 4.5 percent after naming a new chief executive officer.
The FTSE 100 Index (UKX) gained 20.07 points, or 0.3 percent, to 6,871.29 at the close of trading in London. The equity benchmark has risen 6.5 percent from this year’s low on Feb. 4, and is 0.1 percent away from the peak it reached on May 14. The broader FTSE All-Share Index also added 0.3 percent today, while Ireland’s ISEQ Index slipped 0.4 percent.
“The U.S. data has been improving over the last two months, and we look at the first-quarter GDP print as important, but not a game changer to our positive view on U.S. growth,” Citigroup Inc. strategists Bryan Zarnett and Steven Englander wrote in a note to clients. “Most of the downward adjustment is a result of overestimating inventory accumulation and not accurately factoring in the weather distortions that hurt economic activity.”
The number of shares changing hands today in FTSE 100-listed stocks was 41 percent lower than the average of the past 30 days at this time of day, data compiled by Bloomberg showed. Businesses and markets were closed in parts of Europe today for the Ascension Day holiday.
A report from the U.S. Commerce Department showed the world’s biggest economy contracted 1 percent in the first quarter, more than the 0.5 percent drop that economists had forecast. The initial estimate for the period had shown growth of 0.1 percent. Gross domestic product rose at a 2.6 percent annualized pace in the final three months of 2013.
IMI added 3 percent to 1,608 pence as UBS raised its rating on the maker of valves for liquified-natural-gas projects to buy from neutral. Profitability (IMI) will probably rise at IMI’s Fluid Power unit as investment drops as a proportion of sales, according to analyst Mark Fielding. He also cited increased confidence that CEO Mark Selway will accelerate sales growth.
Man Group rose 5 percent to 99.6 pence. The hedge-fund manager said the talks with Numeric may still not lead to a transaction. Numeric uses quantitative analysis to make investments and manages $13.9 billion, according to its website.
Kingfisher lost 4.9 percent to 397 pence, heading for its worst month since January 2013. Europe’s largest home-improvement retailer said retail profit rose to 142 million pounds ($237 million) in the 13 weeks ended May 3, less than the 152 million-pound average analyst estimate compiled by Bloomberg. Kingfisher added that its gross margin fell about 200 basis points in the U.K. and Ireland.
Aggreko fell 4.5 percent to 1,671 pence. Chris Weston, who is currently managing director of Centrica Plc’s International Downstream business, will replace Aggreko’s interim CEO Angus Cockburn in 2015 after the latter decided not to apply for the permanent role. The senior executive team at the supplier of temporary power generators will lack experience and the transition may take as long as a year, Andrew Brooke, an analyst at RBC Capital Markets, said in a note.
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