U.K. stocks advanced the most in three weeks, trimming their weekly drop, as prospects for global economic growth overshadowed a smaller-than-forecast increase in British gross domestic product.
Wolseley Plc, Carnival Plc and InterContinental Hotels Group Plc, which all get more than half of sales outside the U.K., surged at least 4 percent. Taylor Wimpey Plc jumped the most in a year after U.S. new homes climbed 27 percent.
The benchmark FTSE 100 Index rose 58.32, or 1 percent, to 5,723.65, the most since April 1. The increase pared this week’s retreat to 0.4 percent. The FTSE All-Share Index gained 1.1 percent today, while Ireland’s ISEQ Index rallied 2.8 percent.
The biggest budget deficit in 70 years and prospects for parliamentary gridlock are failing to keep U.K. shares from beating Europe’s largest markets in 2010. The FTSE 100 remains 5.7 percent higher this year as investors bet a weak pound and a rebound in global economic growth will help the index, which relies in overseas markets for most of its members’ sales.
“We remain positive about the outlook for U.K. equities,” wrote JPMorgan Chase & Co. strategists Darren Winder and Rob Griffiths in a report distributed today. We “consider the risks to current bottom-up profit estimates to be weighted to the upside.”
Britain’s GDP rose 0.2 percent from the final three months of 2009, when a 0.4 percent expansion ended the recession, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 32 economists was for a 0.4 percent increase.
German, U.S. Economy
In Germany, business confidence rose more than economists forecast to a two-year high in April as the global economic recovery boosted export demand and warmer weather allowed workers back onto construction sites. Orders for U.S. durable goods excluding transportation surged in March by the most since the recession began in December 2007, adding to evidence the recovery is broadening and strengthening.
About 70 percent of earnings for FTSE 100 companies are made outside of the U.K., according to Credit Suisse Group AG in Zurich.
Wolseley, the world’s largest supplier of heating and plumbing products, rose 5.4 percent to 1,658 pence. The company generates 45 percent of its revenue in North America.
Carnival increased 5.9 percent to 2,850 pence, the biggest advance in 10 months. The world’s biggest cruise-line operator got more than 60 percent of sales outside Europe in 2008.
InterContinental advanced 4.4 percent to 1,122 pence, the most since October. The owner of the Holiday Inn brand gets 55 percent of revenue in the Americas.
Taylor Wimpey, who builds homes in U.S. southern states, soared 9.8 percent to 43.99 pence. Purchases of new homes in the U.S. surged in March by the most in almost five decades, the Commerce Department said today, as buyers rushed to qualify for a government tax credit and the weather turned milder.
CRH Plc, the world’s second-largest building-materials maker, climbed 6.4 percent to 21.49 euros as of 5 p.m. in Dublin.
The following stocks also rose or fell in London. Stock symbols are in parentheses:
Air Partner Plc (AIP LN), the company that charters planes for the U.K.’s Queen Elizabeth II, advanced 28 pence, or 8.4 percent, to 360. The carrier said today it’s received an increase in enquiries for business as a result of the closure of European airspace by a volcanic ash cloud this month.
Hornby Plc (HRN LN) jumped 19 pence, or 16 percent, to 137, the biggest gain since 2000. The maker of Scalextric racing cars said it would resume paying dividends on a better-than-expected full-year performance.
SIG Plc (SHI LN), Europe’s largest supplier of insulation and roofing, rose 7.5 pence, or 5.8 percent, to 137.8, the biggest increase since February. The shares were raised to “buy” from “hold” at Royal Bank of Scotland Group Plc.
Analysts’ “forecasts have fallen consistently since 2008, and sentiment remains weak, but we believe a turning point is now within sight” for SIG, RBS wrote in a report.