U.K. stocks advanced, extending a five-year high, after jobless claims in the country fell more than estimated in January and Bank of England minutes showed more members voted for increasing stimulus measures.
Rexam Plc jumped 5.3 percent after full-year profit beat analyst expectations. BHP Billiton retreated 2.4 percent after saying first-half profit declined 58 percent and Marius Kloppers will step down as chief executive officer. RSA Insurance Group Plc tumbled the most in almost nine years as it cut its final dividend for 2012.
The FTSE 100 Index rose 0.3 percent to 6,395.37 at the close in London. The benchmark gauge has rallied 8.4 percent so far this year as U.S. lawmakers reached a budget compromise. The measure is also heading for its ninth monthly increase, its longest winning streak since 1997. The broader FTSE All-Share Index also added 0.3 percent today, while Ireland’s ISEQ Index retreated 0.2 percent.
“There’s the implication that more quantitative easing might be needed to kickstart the U.K. economy,” Richard Hunter, head of U.K. equities at Hargreaves Lansdown Plc in London, said in a phone interview. “Clearly austerity and even the QE we’ve had in the U.K. haven’t gained traction yet.”
Bank of England Governor Mervyn King pushed for more stimulus this month as officials considered an interest-rate cut and expanding the range of assets purchased as possible ways to help bolster the economy, according to the minutes of the central bank’s Feb. 6-7 Monetary Policy Committee meeting.
King, Paul Fisher and David Miles wanted to increase the target for bond purchases by 25 billion pounds ($38.2 billion) to 400 billion pounds on Feb. 7, though were outvoted by the remaining six members of the Monetary Policy. Miles had been alone in calling for more stimulus the previous month. The MPC kept both its benchmark interest rate and its target for bond purchases unchanged at the meeting.
Mark Carney will leave his job as Bank of Canada Governor to replace King at the BOE on June 1.
“Whether there’s any shift away from concentrating on inflation, and towards revitalizing growth; that will be the main yardstick Mark Carney will be measured against,” Hunter said.
U.K. jobless claims declined by 12,500 in January, the Office for National Statistics said in a report today. The median forecast of economists surveyed by Bloomberg called for a drop of 5,500.
In the U.S., Britain’s biggest trading partner, housing starts dropped more than projected last month, a Commerce Department report showed. Housing starts fell at an annual pace of 8.5 percent in January, after a revised 15.7 percent gain the previous month. That compares with the median forecast in a Bloomberg survey for a 3.6 percent decrease.
Rexam advanced 25.3 pence to 502 pence, its biggest advance in a year. Profit before tax was 418 million pounds in 2012 ($645 million), exceeding the 377 million-pound median estimate in a Bloomberg survey.
Spectris Plc gained 0.6 percent to 2,440 pence, its highest price since at least May 1989. The U.K.’s biggest maker of production-testing gear said comparable sales grew 3 percent in 2012 and Chief Executive Officer John O’Higgins is confident for 2013, according to a statement.
BHP Billiton retreated 52.5 pence to 2,183.5 pence. Net income was $4.2 billion, including $1.4 billion in one-time charges, in the six months ended Dec. 31, from $9.9 billion a year ago, BHP said in a statement. This missed the $5.6 billion median estimate of five analysts surveyed by Bloomberg.
The world’s biggest mining company also named copper unit head Andrew Mackenzie as chief executive officer to succeed Marius Kloppers on May 10.
RSA Insurance Group dropped 14 percent to 117 pence, its biggest slide since March 2004. The U.K.’s largest non-life insurer reduced its 2012 second-half payout to 3.9 pence a share from 5.82 pence a share the previous year and forecast a similar cut in 2013.
The number of shares changing hands on FTSE 100-listed companies was 31 percent greater than the average of the past three months, according to data compiled by Bloomberg.