U.K. Stocks Advance on Fed’s Stimulus Comments

U.K. stocks climbed, led by a rally in mining companies, after the Federal Reserve Chairman Ben S. Bernanke said the central bank will remain flexible on its bond-purchase program.

BHP Billiton Ltd. rose to a six-week high after the world’s largest miner reporting iron-ore output that beat analyst estimates. Glencore Xstrata Plc and Anglo American Plc both advanced more than 2 percent.

The FTSE 100 Index rose 15.58 points, or 0.2 percent, to 6,571.93 in London. The gauge earlier fell as much as 0.6 percent after the Bank of England voted 9-0 to maintain its bond-purchase target. The broader FTSE All-Share Index added 0.2 percent today. Ireland’s ISEQ Index both rose 0.4 percent.

“Bernanke and his colleagues have attempted to reassure the markets that tapering is not preset in order to reduce volatility,” Ishaq Siddiqi, market strategist at ETX Capital in London, said. “He’s still talking and will continue tomorrow, but so far he is essentially saying unwinding stimulus is not set in advance.”

The FTSE 100 had tumbled as much as 12 percent since May 22 after Bernanke first said the Fed could pare stimulus measures if the U.S. economy improves. The gauge has since pared its losses and is now down 3.9 percent from the peak.

‘Not Preset’

Commenting in a prepared testimony to the House Financial Services Committee in Washington today, Bernanke said bond purchases were “by no means on a preset course” and could be reduced more quickly or expanded as the economy warranted.

The FTSE 100 fell earlier today after the BOE’s Monetary Policy Committee unanimously voted to keep its 375 billion-pound ($570 billion) program and record low interest rate of 0.5 percent unchanged, according to the minutes published today in London.

It was Mark Carney’s first meeting as the central bank’s governor on July 3-4. BOE Officials Paul Fisher and David Miles had previously called for an increase in bond purchases.

BHP rallied 2 percent to 1,868 pence, its highest price since June 4, after the mining company reported a 17 percent increase in fourth-quarter iron ore production to 47.7 million metric tons as it expands operations in Australia. That beat the 43.2 million-ton median analyst estimate in a Bloomberg survey.

Glencore increased 2.8 percent to 271.95 pence, Anglo American added 2.5 percent to 1,357 pence and Rio Tinto Group, the world’s second-largest mining company, rose 1.1 percent to 2,915 pence.

Fresnillo Plc rose 2.6 percent to 1,042 pence after the metal producer reported a 6.3 percent increase in attributable silver output to 10.9 million ounces in the second quarter. The stock has tumbled 43 percent so far this year.

Profit Outlook

Smiths Group Plc paced declining shares, falling 1 percent to 1,377 pence. The U.K. producer of security scanners said operating profit in the year ending July will be as much as 15 million pounds below expectations because of “adverse” contract outcomes and as its detection unit makes provisions for legal disputes.

JPMorgan Chase & Co. lowered its recommendation for the shares to neutral from overweight.

Unilever Plc lost 1.6 percent to 2,756 pence after Credit Suisse Group AG downgraded the world’s second-biggest consumer goods company to underperform, the equivalent of a sell rating, citing valuations.

Land Securities Group Plc slid 2.5 percent to 945 pence after the U.K.’s largest real estate investment trust by market value said vacancies at its properties were 2 percent in the quarter ending June 30, about the same as the previous three months. Retail properties were 97.2 percent leased, while the number of visitors to the company’s malls fell 2.9 percent from a year earlier.

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