U.K. stocks advanced to their highest level since 1999 after a report that Germany’s Bundesbank is willing to support stimulus measures from the European Central Bank.
Barratt Developments Plc and Persimmon Plc climbed 3.2 percent each after a report that house prices in the City of London and its fringe increased almost 16 percent in the year through April. EasyJet Plc dropped 4.2 percent after saying second-half per-seat revenue will grow in low single-digit percentage.
The FTSE 100 Index added 21.33 points, or 0.3 percent, to 6,873.08 at the close in London, the highest level since December 1999. The broader FTSE All-Share Index also rose 0.3 percent, while Ireland’s ISEQ Index fell 0.7 percent.
“The markets are focusing on wide-ranging factors that have been helping sentiment,” said Henk Potts, who helps oversee about $310 billion as a strategist at Barclays Wealth & Investment Management in London. “M&A activity tends to be a big driving influence in terms of markets and we’re seeing the benefit of that coming through. There’s lots of be enthusiastic about given the surprisingly strong and improving economic backdrop.”
Germany’s central bank is willing to back ECB measures next month if staff forecasts show lower 2016 inflation outlook for the euro area, the Wall Street Journal reported, citing a person familiar with the matter.
Barratt gained 3.2 percent to 386.3 pence, while Persimmon rose 3.2 percent to 1,404 pence. House prices in London’s financial core climbed 15.7 percent in the year through April, Knight Frank LLP said. Prices in Canary Wharf, the redeveloped dockland that has emerged as London’s second business district, jumped 16.2 percent.
“The booming U.K. housing market continues to be strong indeed with improving confidence in that sector,” Barclays’s Potts said. “Expectations of the housing market are that demand will be strong for some time.”
Taylor Wimpey Plc rallied 7.6 percent to 114.4 pence. The U.K.’s third-biggest homebuilder said it expects its operating-profit margin to widen by at least 300 basis points this year.
AstraZeneca Plc rose 0.7 percent to 4,642 pence. Pfizer Inc. Chief Executive Officer Ian Read appeared before Parliament today in a bid to persuade lawmakers that his company’s bid to take over AstraZeneca is good for the British economy. AstraZeneca CEO Pascal Soriot also spoke to legislators, telling them he couldn’t rule out accepting an offer from Pfizer. Pfizer plans to sweeten the $102 billion offer, people with knowledge of the matter said.
EasyJet dropped 4.2 percent to 1,658 pence, its biggest decline since February, after saying per-seat revenue will post low single-digit percentage growth in the second half. RBC Capital Markets analyst Damian Brewer said the outlook most likely reflects caution about the impact on sales of the looming World Cup soccer competition in Brazil.
Vodafone Group Plc fell 2.1 percent to 219.85 pence. U.S. rival AT&T Inc. is said to be in advanced talks to acquire DirecTV for about $50 billion, people familiar with the matter told Bloomberg News.
London Stock Exchange Group Plc lost 2.5 percent to 1,808 pence. The exchange said it is weighing a purchase of Russell Investments Ltd., the indexing and fund-management unit of Northwestern Mutual Life Insurance Co. and intends to fund it by raising equity.