U.K. Stocks Climb Before Debt-Crisis Summit; Fresnillo Rallies
U.K. stocks rose before euro-area leaders gathered at a summit in Brussels as they struggled to solve Europe’s sovereign debt crisis.
Fresnillo Plc (FRES) and Randgold Resources Ltd. (RRS) gained at least 2.5 percent as gold rallied, while Antofagasta Plc (ANTO) and Kazakhmys Plc (KAZ) climbed with copper. Reckitt Benckiser Group Plc (RB/) and Next Plc (NXT) fell more than 2 percent as analysts downgraded the shares.
The FTSE 100 Index (UKX) climbed 0.5 percent to 5,553.24 at the close in London, after swinging between gains and losses more than 10 times today. The FTSE All-Share Index advanced 0.4 percent, while Ireland’s ISEQ Index rose 0.6 percent.
“Traders remain jittery and volumes stunted as the market waits for Europe’s leaders to finally put a lid on the debt crisis,” said Manoj Ladwa, a senior trader at ETX Capital. If the outcome of the summit “is deemed inadequate, we could see a return to the volatility of three months ago.”
European leaders will gather at their second summit in four days tonight in a bid to contain the debt crisis that has Greece on the brink of a default. The political leaders seek to bolster the euro area’s 440 billion-euro ($609 billion) rescue fund, recapitalize banks and provide debt relief to Greece.
The summit follows an Oct. 23 meeting, where leaders excluded a forced restructuring of Greece’s debt. Stocks pared gains today after a European Union official told Bloomberg News that talks with banks on bondholder losses, as part of the second Greek rescue package, were deadlocked and have been suspended.
U.K. stocks fell yesterday after a meeting of all 27 EU finance ministers was canceled, raising concern that today’s summit may fail to reach a comprehensive agreement. The FTSE 100 has slumped 8.8 percent from this year’s high on Feb. 8.
Randgold, Fresnillo Rise
Gold and silver advanced today on concern that policy makers will struggle to resolve the debt crisis, spurring demand for precious metals as a haven.
Randgold Resources advanced 2.5 percent to 6,880 pence, Fresnillo climbed 4.4 percent to 1,654 pence and African Barrick Gold Plc jumped 4.9 percent to 551 pence.
Copper producers also advanced as the base metal increased in London amid speculation that China, the top global consumer of the metal, may lower interest rates. Antofagasta climbed 2.1 percent to 1,176 pence and Kazakhmys gained 1.1 percent to 929 pence.
Imperial Tobacco Group Plc (IMT) jumped 3.2 percent to 2,280 pence, following two days of losses. Rival British American Tobacco Plc (BATS) today a 7 percent increase in organic revenue for the first nine months of the year and cigarette shipments that exceeded analysts’ estimates. The shares rose 1.5 percent to 2,896 pence.
Imperial Tobacco is scheduled to post results next week.
Reckitt, Next Slip
Reckitt Benckiser lost 2.1 percent to 3,260 pence as ING Groep NV lowered its recommendation for the company to “hold” from “buy,” while Liberum Capital cut its rating to “sell” from “hold.”
The stock declined 3.4 percent yesterday after the maker of Lysol cleaners predicted lower sales and profit at its pharmaceutical division in the fourth quarter.
Next lost 2.1 percent to 2,557 pence after Deutsche Bank AG downgraded the clothing retailer to “hold” from “buy.”
Elsewhere, Informa Plc (INF) gained 3.3 percent to 367.8 pence as the publisher of Lloyd’s List reiterated its full-year forecast and reported a 4.2 percent increase in third-quarter organic revenue. The company also said it sees “positive momentum” in forward bookings.
Berkeley Group Holdings Plc (BKG) increased 2.5 percent to 1,250 pence after Goldman Sachs Group Inc. upgraded the property developer to “buy” from “neutral.”
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