U.K. stocks rose, with the benchmark FTSE 100 Index rebounding from a two-month low, as higher metal prices boosted raw-material companies, overshadowing Moody’s Investors Service’s downgrade of 14 banks’ debt outlook.
Anglo American Plc climbed 1.5 percent and Kazakhmys Plc rose 2.3 percent as copper surged in London. Cable & Wireless Worldwide Plc rallied 4.9 percent after earnings beat estimates. Marks & Spencer Group Plc slid 2.9 percent after saying the economic outlook remained challenging.
The FTSE 100 advanced 22.52, or 0.4 percent, to 5,858.41 at the 4:30 p.m. close in London. The FTSE All-Share Index and Ireland’s ISEQ Index also gained 0.4 percent.
“Valuations are still very attractive,” Yogi Dewan, the chief executive officer at Hassium Asset Management LLP, said in a Bloomberg Television interview with Francine Lacqua in London. “Ratings agencies have been too slow to respond. Investors are already aware of the problems.”
The FTSE 100 has declined 0.7 percent this year, dragging its valuation to 10.3 times the estimated earnings of its companies. That’s near the cheapest since July last year.
Anglo American advanced 1.5 percent to 2,873.5 pence and Kazakhmys rose 2.3 percent to 1,235 pence. Copper, nickel and tin rallied on the London Metal Exchange.
Cable & Wireless
Cable & Wireless rallied 4.9 percent to 52.1 pence. The London-based provider of telecommunications services reported full-year earnings and sales that beat analyst estimates and predicted free cash flow will grow this year.
Cairn Energy Plc climbed 4 percent to 435.8 pence after announcing plans to drill as many as four wells off Greenland at a cost of $600 million.
Mitie Group Plc surged 5.2 percent to 231.9 pence, its second day of gains. The company yesterday reported results that showed “an encouraging pick-up in organic growth,” according to a report from UBS AG analyst Alex Hugh, who raised his price estimate on the shares by 7.7 percent to 280 pence. Royal Bank of Scotland Group Plc analyst Kean Marden wrote in a report today that the company’s organic sales growth guidance may be “conservative.”
Marks & Spencer slid 2.9 percent to 385.6 pence. The U.K.’s largest clothing retailer said the economic outlook remains challenging as it reported 13 percent growth in profit.
Lloyds Banking Group Plc and Royal Bank of Scotland are among 14 U.K. lenders whose debt Moody’s is considering downgrading as withdrawal of government support may increase credit risk.
Lloyds slid 2.2 percent to 49.74 pence while RBS lost 1.1 percent to 40.44 pence. Barclays Plc dropped 1 percent to 265.6 pence and HSBC Holdings Plc slipped 0.5 percent to 623.5 pence.