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U.K. Stocks Rise After Confidence Report; Petrofac Gains

May 21 (Bloomberg) -- U.K. stocks climbed, following the FTSE 100 Index’s biggest drop in more than a month, as a report showed euro-area confidence increased more than forecast.

Petrofac Ltd. gained 2.2 percent after Barclays Plc raised its recommendation for the U.K.’s largest oil and gas engineer. Wm Morrison Supermarkets Plc slid 2.2 percent after Deutsche Bank AG recommended selling the grocer’s shares. HSBC Holdings Plc traded without the right to its latest dividend, shaving 4.48 points off the benchmark gauge.

The FTSE 100 advanced 19.04 points, or 0.3 percent, to 6,821.04 at the close of trading in London after declining as much as 0.3 percent earlier. The equity benchmark gauge rose to a 14-year high on May 14 and climbed 0.6 percent last week. The FTSE All-Share Index gained 0.4 percent today, and Ireland’s ISEQ Index added 0.9 percent.

“A lot of investors feel like we’ve had a good run, and that a correction is inevitably on its way,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “The market will tend to move sideways.”

An advance report from the European Commission showed that a gauge of euro-area consumer confidence rose to minus 7.1 in May from minus 8.6 last month. Economists in a Bloomberg survey had forecast an increase to minus 8.3.

In the U.K., data from the Office for National Statistics showed that retail sales including auto fuel gained 1.3 percent in April, a third monthly increase, following an upwardly revised 0.5 percent the prior month. Economists had forecast an advance of 0.4 percent.

BOE Minutes

Minutes of the Bank of England’s May 7-8 meeting, when it held the key interest rate at 0.5 percent, showed that the arguments in favor of an interest-rate increase are growing stronger for some officials. Still, all Monetary Policy Committee members agreed they needed to see “more evidence of slack reducing” before it would be time to increase the benchmark interest rate from a record low.

The Federal Reserve will publish minutes of its April policy meeting after the close of European markets.

Petrofac advanced 2.2 percent to 1,220 pence after Barclays raised the stock to equal weight, the equivalent of hold, from underweight. Barclays said value has returned to the U.K.’s largest oil-services company along with an increase in orders.

Britvic Earnings

Britvic Plc increased 7.9 percent to 749 pence. The maker of Robinsons fruit drinks posted first-half revenue of 670.7 million pounds, topping the 657.8 million pounds analysts had estimated. The reported earnings before interest and taxes of 59 million pounds also beat projections.

DCC Plc rose 7.6 percent, the most since January 2009, to 3,340 pence. The Irish distribution company said full-year operating profit excluding some items rose to 208 million pounds, compared with the 202 million pounds analysts had estimated. The company said profit climbed to 191.2 pence a share, beating the 185-pence projection.

Morrison slipped 2.2 percent to 205 pence. Deutsche Bank cut the stock to sell from hold, saying the recent stock rally is unjustified and that it doesn’t see a near-term improvement in the sales trend. Morrison advanced 9.8 percent from its low on May 7 through yesterday, compared with a 0.1 percent gain for the FTSE 100. Tesco Plc advanced 7 percent in the period, while J Sainsbury Plc added 4.8 percent.

HSBC slid 0.4 percent to 618.5 pence for the biggest drag to the FTSE 100. The stock gained 5.6 percent from its low on May 8 through yesterday.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Srinivasan Sivabalan

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