U.K. stocks rose, with the benchmark FTSE 100 Index posting its first weekly gain in a month, as mining companies rallied and investors watched the expiry of derivative contracts.
Polymetal International Plc led commodity producers higher as gold climbed. Burberry Group Plc fell 2.1 percent after Bank of America Corp. downgraded the U.K.’s largest luxury-goods maker to the equivalent of hold. Royal Bank of Scotland Group Plc dropped 2 percent after Barclays Plc downgraded the shares.
The FTSE 100 advanced 14.73 points, or 0.2 percent, to 6,557.17 at the close. The gauge rose 0.5 percent this week amid growing optimism that tit-for-tat sanctions between the U.S. and Russia won’t lead to wider trade and business disruption. The broader FTSE All-Share Index added 0.1 percent, while Ireland’s ISEQ Index climbed 0.3 percent. Trading was more volatile as futures and options contracts expire in a process known as witching.
“In the last year to 18 months, we’ve had incredible amounts of potentially derailing news to overcome, and every single time, the markets have come through,” Toby Morris, a London-based sales trader at CMC Markets Plc, said by telephone. “A lot of people are looking over their shoulder for the potential of a far more drastic selloff than we’ve seen. Because every time it doesn’t materialize, we move higher.”
A report from the European Commission showed that consumer confidence in the 18-nation euro area improved this month. The commission’s index of household confidence increased to minus 9.3 from minus 12.7 in February, beating the median of economist estimates compiled by Bloomberg.
Polymetal International added 2 percent to 626.5 pence and Fresnillo Plc climbed 2.1 percent to 885 pence as gold advanced for the first day this week.
Anglo American Plc rose 2 percent to 1,439.5 pence as a gauge of London-listed mining companies rallied for a second day. Copper futures rebounded on the London Metal Exchange, pushing the metal to a gain for the week. Vedanta Resources Plc increased 2 percent to 848.5 pence.
Burberry fell 2.1 percent to 1,390 pence, retreating for the fourth consecutive day. Bank of America cut the U.K.’s largest luxury-goods maker to neutral from buy, saying currency moves may reduce earnings before interest and taxes by as much as 50 million pounds ($82 million) in 2015.
RBS dropped 2 percent to 299.1 pence. Barclays downgraded RBS to equal weight, a recommendation similar to hold, from overweight. The brokerage said the tangible book value of RBS won’t rise above its 2013 level until 2016 because of cost pressures.
Crest Nicholson Holdings Plc slid 3.3 percent to 386.9 pence. Deutsche Bank AG is selling a 6.6 percent stake in the company, according to terms obtained by Bloomberg News.
Hikma Pharmaceuticals Plc lost 2.9 percent to 1,623 pence. Jefferies Group LLC cut its recommendation on the London-based drugmaker to hold from buy, citing its valuation. Hikma is trading at 23.4 times its estimated earnings, compared with the five-year average of 19.74 times.