Most U.K. Stocks Gain; BAE Shares Advance, ARM Holdings Drops
Most U.K. stocks advanced, extending the benchmark FTSE 100 (UKX) Index’s biggest rally in almost two months, after U.S. pending home sales unexpectedly increased and jobless-benefit claims declined.
BAE Systems Plc paced advancing shares after the defense company won a U.S. contract. Man Group (EMG) Plc climbed as Numis Securities Ltd. recommended the shares. ARM Holdings Plc (ARM) dropped 3.8 percent from an eight-year high. Lonmin Plc (LMI) fell as Citigroup Inc. downgraded the mining company.
The FTSE 100 rose 4.63, or less than 0.1 percent to 5,371.04 at the 4:30 p.m. close in London, finishing higher in the final minutes of trading. The gauge swung between gains and losses more than 20 times today after jumping 2.7 percent yesterday on U.S. and Chinese manufacturing data. The FTSE All-Share Index (ASX) rose 0.2 percent, while Ireland’s ISEQ Index (ISEQ) fell 0.6 percent.
“It’s been a far from convincing session with traders unwilling to commit to further gains,” said Ben Critchley, a London-based sales trader at IG Index. “Tomorrow’s non-farm payrolls are without doubt serving to rein in the upside, despite the fall in weekly jobless claims.”
Figures today showed contracts to purchase U.S. previously owned houses rose 5.2 percent in July and the number of Americans seeking jobless benefits fell by 6,000 last week, in line with the median forecast of economists surveyed by Bloomberg News.
Tomorrow’s Labor Department figures may show U.S. companies added 40,000 workers to their payrolls in August. The average from May through July was 51,000 jobs, down from 200,000 in the previous two months.
BAE Systems (BA/) jumped 3.7 percent to 313.3 pence after Europe’s largest defense company said it won a $629 million contract from the U.S. Mine Resistant Ambush Protected Joint Program Office to upgrade 1,700 Caiman MRAP vehicles.
Man Group rallied 5.8 percent to 229 pence, extending yesterday’s 4 percent advance. Numis raised its recommendation for the biggest publicly traded hedge-fund firm to “buy” from “reduce.”
ARM Holdings dropped 3.8 percent to 360 pence, falling for the first time in ten days. The shares climbed to an eight-year high yesterday following Intel Corp.’s purchase of Infineon Technologies AG’s wireless operations earlier this week.
“To say ARM benefits is farfetched in our view,” Sandeep Deshpande, a London-based analyst at JPMorgan Chase & Co., wrote in a report. “At best Intel buying Infineon’s wireless business is neutral for ARM, at worst negative. The stock is trading at much higher multiples than historical levels which in our view is unwarranted.” Deshpande has an “underweight” recommendation on the shares.
Lonmin lost 1.9 percent to 1,577 pence after Citigroup downgraded the platinum producer to “hold” from “buy,” saying a stronger trend in auto demand growth in the fourth quarter now looks “unlikely.” Most platinum and palladium is used in automotive pollution-control devices.
The following is a list of companies whose shares either rose or fell in the U.K. and Irish markets. Stock symbols are in parentheses.
Carluccio’s Plc (CARL LN) soared 45 pence, or 47 percent, to 141 pence after Billionaire Micky Jagtiani’s Landmark Group Inc. agreed to buy the U.K. operator of Italian restaurants and food stores in a transaction that values the company at 90.3 million pounds ($139 million).
Hays Plc (HAS) jumped 3.55 pence, or 3.8 percent, to 97.55 even as the company reported a 91 percent drop in full-year profit. Chief Executive Officer Alistair Cox said Britain’s largest recruitment company returned to growth in the second half thanks to “excellent performances” in the Asia Pacific region and Germany. He also announced plans to double international recruiters overseas.
International Power Plc (IPR LN) climbed 9.1 pence, or 2.4 percent, to 387.6 after Deutsche Bank AG raised its recommendation for the U.K.-based utility to “buy” from “hold.”
McBride Plc (MCB) surged 19 pence, or 13 percent, to 160 after Europe’s biggest supplier of store-brand household goods said full-year profit rose 33 percent on increased revenue and lower costs.
Redrow Plc (RDW) increased 3.1 pence, or 2.6 percent, to 121.2 after Citigroup raised its recommendation for the homebuilder to “buy” from ‘hold.” Rival Taylor Wimpey Plc (TW/) advanced 1.4 pence, or 5.2 percent, to 28.46 as Citigroup analysts including Clyde Lewis said in a report that earnings will probably be stable this year.
Yell Group Plc (YELL LN) surged 2.08 pence, or 13 percent, to 17.79, the biggest gain since February, amid speculation about a takeover bid for the publisher of the U.K.’s yellow pages directories.
“M&A activity continues to fill the air,” David Buik, a London-based market strategist at BGC Partners, wrote in an e-mail. “Interested parties are suggesting that Yell might be for sale at around 30 pence” a share, he said. Yell spokesman Jon Salmon said via phone today that the company doesn’t comment on market speculation.
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