U.K. stocks closed little changed, after fluctuating between gains and losses, as a drop in U.S. housing starts offset the lowest inflation in 4 1/2 years in Great Britain.
Shire Plc rallied to the highest price since it sold shares to the public in 1996 after a report that the drugmaker hired Citigroup Inc. to prepare for potential takeover offers. Whitbread Plc gained 2.2 percent after posting better-than-estimated quarterly sales at Premier Inn budget hotels and Costa Coffee shops. Ashtead Group Plc led declining shares.
The FTSE 100 Index gained 12.13 points, or 0.2 percent, to 6,766.77 at the close of trading in London. The gauge fell 1.2 percent last week as Britain pledged to boost the powers of the Bank of England to rein in mortgage lending and BOE Governor Mark Carney said interest rates may increase sooner than investors expect. The FTSE All-Share Index added less than 0.1 percent today, while Ireland’s ISEQ Index lost 0.5 percent.
“The U.K. inflation report has calmed some investors,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “But we won’t see much movement in either direction before we see what the Fed’s doing tomorrow. The U.S. housing numbers have shown that the real-estate market in America isn’t going too well, or at least that it’s not in the rebound phase any more.”
A U.S. Commerce Department report showed that housing starts decreased in May to an annualized rate of slightly more than 1 million, from 1.07 million in April. Building permits, a proxy for future construction, also decreased.
U.K. consumer prices rose 1.5 percent in May, the least since October 2009 and down from 1.8 percent in April, the Office for National Statistics said in London. That compared with a median forecast of 1.7 percent in a Bloomberg News survey. Inflation has been at or below the BOE’s 2 percent target for six months, the longest stretch since 2009.
In the U.S., Federal Reserve policy makers begin a two-day meeting today. They may reduce asset purchases by $10 billion for a fifth straight month, bringing it to $35 billion, according to the median of estimates compiled by Bloomberg.
Chinese Premier Li Keqiang began a visit to the U.K. today as China’s embassy said deals totaling $30 billion will be announced in the next two days.
Shire climbed 3.5 percent to 3,660 pence. The company hired Citigroup as it may receive offers following a spate of deals in the pharmaceutical industry, Reuters reported, citing people familiar with the matter.
Whitbread rose 2.2 percent to 4,259 pence. First-quarter comparable sales at Premier Inn increased 9.5 percent, compared with the 7 percent gain analysts had estimated. Costa Coffee sales advanced 4.5 percent, more than the 4 percent projected.
Wm Morrison Supermarkets Plc increased 2.3 percent to 192.6 pence. The grocer plans to cut about 2,600 management jobs as it seeks reduce costs amid a slump in sales that caused it to announce 1 billion pounds ($1.7 billion) of price cuts earlier this year.
Ashtead Group dropped 6.3 percent to 831.5 pence, posting the worst performance on the FTSE 100.