U.K. stocks rose after Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank “will do all that it can” to ensure that the world’s largest economy continues to recover.
Cable & Wireless Worldwide Plc soared 5.7 percent as telecommunication shares were the biggest gainers on the FTSE 100. BP dropped 1.5 percent after a senior vice president at Europe’s second-biggest oil company told a U.S. federal panel that he didn’t know who was in charge of the Deepwater Horizon rig days before it exploded.
The FTSE 100 Index gained 0.9 percent to 5,201.56 at the 4:30 p.m. close in London. The benchmark index increased 0.1 percent this week. The gauge has climbed 8.3 percent from this year’s low on July 1 as concern eased that Europe’s sovereign-debt crisis will choke off the global recovery. The FTSE All-Share Index added 0.9 percent and Ireland’s ISEQ Index climbed 0.1 percent.
The Fed chairman gave a detailed analysis of the economy and said growth during the past year has been “too slow” and unemployment “too high.” Still, he said a handoff from fiscal stimulus and inventory re-stocking to consumer spending and business investment “appears to be under way.” He also said that the “preconditions” for growth in 2011 are “in place.”
Bernanke said the risk of an “undesirable rise in inflation or of significant further disinflation seems low.” He said the Fed has several tools if prices decelerate, or job growth stagnates, including shifting the composition of its bond reinvestment strategy.
U.S. Economy Revision
The U.S. economy grew at a 1.6 percent annual rate in the second quarter, less than previously calculated, as companies reined in inventories and the trade deficit widened. The revised gain in gross domestic product was bigger than the median forecast of economists surveyed by Bloomberg News and compares with a 2.4 percent estimate issued last month, figures from the Commerce Department showed today in Washington.
Cable & Wireless gained 5.7 percent to 66.2 pence. Vodafone Group Plc advanced 2.8 percent to 153.6 pence and BT Group Plc rose 2.8 percent to 134.2 pence as telecommunication stocks rallied across Europe. A gauge of the industry climbed 2.2 percent.
Melrose Plc added 9.9 percent to 243.6 pence. The company which owns the maker of handles for Gillette razors said first-half sales fell to 675.7 million pounds ($1.05 billion) from 684.7 million pounds a year earlier.
BP Plc retreated 1.5 percent to 379.7 pence, paring yesterday’s gain. Company executives told U.S. investigators they didn’t know who was in charge of the Deepwater Horizon rig in the Gulf of Mexico or who made key decisions before the vessel exploded in April, killing 11 workers, sinking and spewing millions of barrels of crude oil into the sea.
Tullow Oil slid 3.8 percent to 1,211 pence. Uganda has canceled one of Tullow’s exploration licenses in Lake Albert because it expired and the company hasn’t applied for a replacement production license, Kampala’s New Vision newspaper reported, citing a letter from Hillary Onek, the country’s energy minister.