U.K. stocks were little changed as speculation that central banks will ease monetary policy offset a report showing the number of Americans filing applications for unemployment benefits climbed last week to a one-month high.
Randgold Resources Ltd. and Fresnillo Plc each advanced more than 3.5 percent. Anglo American Plc climbed 1.7 percent as the mining company reached an agreement to end a 10-month dispute over a copper mine in Chile. Petropavlovsk Plc plunged 16 percent, its biggest slump in more than 3 1/2 years.
The benchmark FTSE 100 Index gained 2.4 points, or less than 0.1 percent, to 5,776.6 at the close in London, after earlier rising as much as 0.6 percent. Stocks retreated the most in a month yesterday, led by a selloff in mining companies, as BHP Billiton Ltd. put $68 billion of projects on hold and Japan reported a wider-than-estimated trade deficit. The broader FTSE All-Share Index also rose less than 0.1 percent today, while Ireland’s ISEQ Index declined 0.3 percent.
“I’ve always taken the view that there is a very high probability of QE3,” said Robert Parker, a senior adviser at Credit Suisse Asset Management in London, in a Bloomberg TV interview, referring to a third round of quantitative easing. “Politically, I think that has to be in September.”
Minutes from the Federal Open Market Committee’s July 31-Aug. 1 meeting showed that many members decided that they would soon need to opt for further stimulus.
“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the record of the gathering.
The number of Americans filing applications for unemployment benefits climbed last week to a one-month high, showing little progress in the labor market. Jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, a Labor Department release showed. The median forecast of 41 economists surveyed by Bloomberg had called for 365,000.
In China, a preliminary report today indicated that manufacturing will contract at a faster pace in August, signaling the country’s economy needs more monetary and fiscal stimulus to secure a second-half rebound in growth.
A preliminary reading of 47.8 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics compared with July’s final 49.3 figure. If confirmed, it would be the lowest level since November and the 10th month that the reading has stayed below 50, the longest run in the index’s eight-year history.
German Chancellor Angela Merkel hosts French President Francois Hollande today as the leaders of Europe’s two biggest economies seek common ground on Greece and the wider euro-area debt crisis.
Greece’s Prime Minister, Antonis Samaras, will follow Hollande to Berlin tomorrow and travel to Paris on Aug. 25. He used an interview published yesterday in Bild newspaper, Germany’s newspaper, to call for more time to carry out policy changes to address his country’s debt woes.
Randgold Resources, a miner of the precious metal in Africa, rose 4.2 percent to 6,400 pence as gold rallied to a 16-week high. Fresnillo, the world’s biggest primary silver producer, gained 3.9 percent to 1,586 pence. Antofagasta Plc, which owns copper mines in Chile, climbed 2.9 percent to 1,152 pence. A gauge of commodity producers climbed, limiting the Stoxx Europe 600 Index’s slide.
Anglo American added 1.7 percent to 1,941.5 pence. The mining company will reduce its stake in its Sur unit, which owns the Los Bronces mine in central Chile, to 50.1 percent from 75.5 percent, according to a statement today.
Vedanta Resources Plc advanced 1 percent to 940.5 pence. The copper producer controlled by billionaire Anil Agarwal will raise its offer to increase its stakes in Hindustan Zinc Ltd. and Bharat Aluminium Co.
The company will ask for shareholder approval on Aug. 28 to offer as much as 15 percent more for Hindustan Zinc, it said. Vedanta will raise its offer for Bharat Aluminium as much as 63 percent to $550 million.
Diageo Plc gained 1 percent to 1,698 pence. The world’s biggest distiller reported increased annual revenue and profit as a recovery in demand for spirits in the U.S. and sales in emerging markets help offset tough European conditions.
Earnings before interest and tax, excluding some items, rose to 3.2 billion pounds ($5.1 billion) from 2.9 billion pounds a year earlier, the London-based maker of Johnnie Walker whisky said today in a statement.
WH Smith, Petropavlovsk
WH Smith Plc jumped 2.7 percent to 597.5 pence after the U.K. magazine retailer and stationer with more than 1,000 stores and travel shops said it plans a further share buyback of as much as 50 million pounds.
Petropavlovsk tumbled 16 percent to 394 pence, its biggest decline since December 2008. The producer of gold in Russia said first-half profit fell 90 percent as interest payments and depreciation costs rose.
Net income slumped to $11 million from $108.2 million a year earlier, Petropavlovsk said in a statement. Interest charges more than doubled to $34.6 million in the period and the company took a depreciation charge of $106.9 million.
Kazakhmys Plc dropped 3.4 percent to 680.5 pence. The biggest copper producer in Kazakhstan said first-half profit slumped 67 percent as volumes dropped and prices declined.
Net income shrank to $121 million, or 23 cents a share, from $374 million, or 70 cents, a year earlier, the company said. Sales fell 17 percent to $1.5 billion.
IMI Plc slipped 2.6 percent to 861 pence, dropping for a fourth day, after the engineering company said its sales growth will probably slow in the second half.