Most U.K. stocks advanced, sending the benchmark FTSE 100 Index higher for a second day, led by gains in real estate companies after house prices rose to a record last month.
Land Securities Group Plc, Britain’s largest real estate investment trust, and Persimmon Plc both climbed at least 1.5 percent. Glencore Xstrata Plc led a rally in commodity producers as base metals climbed. HSBC Holdings Plc led declining shares, falling 1.5 percent.
The FTSE 100 Index rose 3.63 points, or 0.1 percent, to 6,308.26 at the close in London as about two stocks rose for every one that fell. The gauge still lost 1.6 percent this week, for a fourth weekly drop, its longest stretch of losses in 14 months.
“The recent pullback provides investors with another buying opportunity,” Citigroup Inc. strategists including Anna Esposito wrote in a report to clients dated yesterday. “The macro backdrop is likely to be supportive for equities with modest global gross domestic product growth, low inflation and super-low interest rates.”
The broader FTSE All-Share Index gained 0.2 percent today and Ireland’s ISEQ Index added 1.1 percent. The volume of shares changing hands in companies listed on the FTSE 100 was 7.2 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.
Gains were limited as a U.S. report showed industrial production in the world’s largest economy was unchanged in May and followed a revised 0.4 percent decrease in April that was smaller than previously posted, a Federal Reserve report showed today in Washington. The median forecast in a Bloomberg survey called for a 0.2 percent advance.
Property companies climbed after a report showed house prices in England and Wales rose to a record in May as government measures to ease credit strains improved the availability of mortgages.
The average cost of a home rose 0.4 percent from April to 233,061 pounds ($365,000), Acadametrics and LSL Property Services Plc said in a monthly report published in London today. Prices were up 2.7 percent from a year earlier.
Land Securities gained 1.5 percent to 902 pence, British Land Co., the U.K.’s second largest REIT, advanced 2.1 percent to 595.5 pence and Hammerson Plc rose 2.1 percent to 507 pence.
Persimmon led homebuilders higher, increasing 1.8 percent to 1,204 pence. Taylor Wimpey Plc added 2.9 percent 94.85 pence and Barratt Developments Plc climbed 3.5 percent to 310 pence.
Great Portland Estates Plc, the real estate developer focused on London’s West End, rallied 3.9 percent to 548 pence. UBS AG upgraded the company to buy from neutral, following a recent decline in the shares.
Among commodity producers, Antofagasta Plc rose 1.4 percent to 904 pence as base metals advanced in London. Glencore Xstrata added 3.2 percent to 315.9 pence and Rio Tinto Group increased 1 percent to 2,786 pence.
HSBC, the heaviest-weighted stock on the FTSE 100, slid 1.5 percent to 680.1 pence for a fifth day of declines.
Severn Trent Plc slid 1.4 percent to 1,760 pence, extending its decline this week to 15 percent after Borealis Infrastructure Management Inc. and its partners walked away from their 5.3 billion-pound ($8.3 billion) offer for the U.K. water utility.