U.K. stocks were little changed as U.S. politicians discussed measures to prevent the so-called fiscal cliff of automatic tax increases and spending cuts from coming into effect next month.
Centamin Plc surged 25 percent after saying fuel supplies to its Sukari gold mine in Egypt may resume. London Stock Exchange Group Plc rose 4.2 percent as U.K. regulators cleared its purchase of a stake in LCH.Clearnet Group Ltd. Volex Plc plunged 37 percent after saying demand weakened across all its businesses in the second half of the year.
The FTSE 100 Index slipped 7.85 points, or 0.1 percent, to 5,921.76 at the close in London. The benchmark measure posted a weekly advance of 0.1 percent for a fourth straight gain. It has rallied 13 percent since a low on June 1 as the European Central Bank announced an unlimited bond-buying plan and the Federal Reserve began a third round of asset purchases in the U.S. The broader FTSE All-Share Index and Ireland’s ISEQ Index were also little changed today.
“The Christmas rally seems to have taken a brief pause,” said Angus Campbell, head of market analysis at Capital Spreads in London. “Whilst many expect a resolution to the U.S. fiscal cliff negotiations, some are coming to terms with the possibility that we may indeed go over it. Hopes are slowly being dashed and, yesterday, House of Representatives leader John Boehner announced nothing new.”
President Barack Obama and House Speaker Boehner met yesterday to discuss a new budget aimed at preventing more than $600 billion of spending cuts and tax increases from coming into effect at the beginning of next year.
Industrial production in the world’s largest economy rose 1.1 percent in November, after a revised 0.7 percent drop a month earlier, the Fed said in a report. The median forecast of economists surveyed by Bloomberg called for a 0.3 percent gain.
In China, the preliminary reading for a manufacturing index based on a survey of purchasing managers was 50.9 for this month, according to a release by HSBC Holdings Plc and Markit Economics. That compared with the median estimate of 50.8 by economists in a Bloomberg survey and a final reading of 50.5 in November. A level above 50 shows expansion.
Standard & Poor’s lowered its outlook on Britain’s top credit rating to negative, citing weak economic growth and a worsening debt profile. The outlook on the AAA grade, revised from stable, reflects “our view of a one-in-three chance that we could lower the ratings in the next two years,” S&P said in a statement late yesterday.
Centamin jumped 25 percent to 34.64 pence, the biggest gain since its 2001 initial share sale, after saying Egyptian General Petroleum Corporation will resume diesel supplies to Chevron Corp., which provides fuel for its Sukari gold mine.
The company plunged 47 percent yesterday after halting production, saying it received an “illegal retrospective claim” from EGPC for $65 million and wouldn’t get fuel until the amount is paid.
LSE advanced 4.2 percent to 1,052 pence, the highest price since Sept. 25, as the Office of Fair Trading cleared the purchase of a majority holding in LCH.Clearnet. The operator of Europe’s oldest independent stock exchange agreed to buy a stake in the region’s biggest clearinghouse for 463 million euros ($610 million) in March.
Bunzl Plc, which provides supply services for grocery and health-care companies, advanced 0.6 percent to 1,065 pence after Citigroup Inc. raised its recommendation on the shares to buy from neutral.
Volex slumped 37 percent to 89 pence, the most since at least February 1991. The U.K. maker of power cords for devices including Apple Inc.’s iPhone said it has seen delays in production and a “general softening of demand” in sales in the second half of the year, from an earlier forecast of growth.
Full-year revenue will be between $470 million and $485 million, the company said in a statement, compared with a Sept. 18 estimate for sales to be about 5 percent more than last year’s $518 million.
Weir Group Plc slid 1.6 percent to 1,807 pence after Dahlman Rose & Co. said in a report that the company may see slower growth in its mining business next year.