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U.K. Stocks Climb for a 5th Day as Imperial Tobacco Gains

U.K. stocks rose, completing their biggest five-day gain since April, after a report showed inflation cooled more than economists had forecast.

Imperial Tobacco Group Plc (IMT) added 2.3 percent after Europe’s second-biggest tobacco company reported a smaller drop in sales than analysts had estimated. Balfour Beatty Plc climbed 3.2 percent after Carillion Plc made a new bid for the company. BHP Billiton (BLT) Ltd. fell the most since October 2011 after posting full-year profit that missed projections.

The FTSE 100 Index (UKX) rose 38.06 points, or 0.6 percent, to 6,779.31 at the close in London. The benchmark gauge has rallied 2.2 percent in the past five trading days amid speculation that the Bank of England will delay raising interest rates. The broader FTSE All-Share Index added 0.6 today, while Ireland’s ISEQ Index declined 0.4.

The drop in inflation gives the BOE room to keep its key interest rate at a record low. The rate of consumer-price growth fell to 1.6 percent in July from 1.9 percent the previous month, the Office for National Statistics said. Economists had forecast 1.8 percent.

The BOE publishes the minutes from its August session tomorrow, while the Federal Reserve releases the minutes of its July 29-30 policy meeting. Both central banks are considering when to start raising interest rates as recovery takes hold in their respective economies.

Earnings Beat

Imperial Tobacco added 2.3 percent to 2,585 pence. Sales fell 1 percent in the nine months through June, the maker of Davidoff and Gauloises cigarettes said in a statement. That beat the average analyst projection for revenue to drop 2 percent.

Balfour Beatty added 3.2 percent to 256 pence. Carillion’s revised offer values Balfour Beatty at 2.1 billion pounds ($3.5 billion) and would give Balfour Beatty investors 58.3 percent of the new company and a cash dividend of 8.5 pence per Balfour Beatty share, Carillion said. That represents a premium of 36 percent to the weighted average share price before the talks were announced. A previous offer would have given Balfour shareholders a 56.5 percent stake.

BHP Billiton lost 4.9 percent to 1,965 pence. The world’s largest mining company posted underlying profit of $13.4 billion in the 12 months to June 30, trailing the average analyst estimate of $13.6 billion. The Melbourne-based producer also announced a long-awaited split, separating off aluminum to coal assets from Australia to South Africa in potentially the industry’s biggest spinoff.

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

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

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