U.K. Stocks Climb for First Day in Three; Vodafone, Lloyds Rally
Vodafone increased 1.8 percent as the world’s largest mobile-phone company boosted its full-year earnings forecast. Lloyds Banking, Britain’s biggest mortgage provider, and Prudential, the nation’s largest insurer by market value, advanced at least 3 percent.
The benchmark FTSE 100 Index (UKX) rose 56.52, or 1 percent, to 5,567.34 at the close in London, paring last week’s 3.1 percent retreat. The FTSE All-Share Index and Ireland’s ISEQ Index also climbed 1 percent.
“A raft of corporate numbers have helped push the FTSE 100 towards recent highs,” said Manoj Ladwa, a senior trader at ETX Capital in London. “The market remains fairly robust in the face of ongoing sovereign-debt issues.”
Stocks fell yesterday amid concern the European debt crisis may spread to Italy from Greece. Italy’s 10-year borrowing costs surged to a euro-era record, near to levels that drove Greece, Ireland and Portugal to seek bailouts.
Italian Prime Minister Silvio Berlusconi failed to muster an absolute majority in a routine parliamentary ballot today, fueling calls for him to resign as the nation struggles to convince investors it can fund itself.
The 630-seat Chamber of Deputies approved the measure with 308 votes. The lower house had failed to pass the report in an initial ballot last month, prompting a confidence motion that Berlusconi won with 316 votes on Oct. 14. Since then Berlusconi has faced defections that reduced his majority.
Last Week’s Drop
The FTSE 100 declined for the first week in six last week after a failed attempt by Greek Prime Minister George Papandreou to hold a referendum on the latest euro-area bailout package spurred concern the nation may default.
Vodafone rose 1.8 percent to 176 pence, the biggest gain in four weeks, as the company boosted its full-year adjusted operating profit forecast of 11.4 billion pounds ($18.3 billion) to 11.8 billion pounds. First-half earnings before interest, taxes, depreciation and amortization climbed 2.3 percent to 7.53 billion pounds, topping analyst estimates, on higher sales in India and new tariff plans.
Lloyds jumped 4.4 percent to 28.9 pence, rising for the first time in eight days, even as it reported a 21 percent decline in third-quarter pretax profit to 644 million pounds. The bank’s nine-month impairment charges dropped by 22 percent to 7.38 billion pounds while bad loan provisions declined 30 percent to 1.96 billion pounds in the third quarter.
“Lloyds’ third-quarter results are the best for 18 months,” UBS AG analysts wrote in a report today. “While the group is maintaining a conservative outlook and is not changing full-year guidance, impairment was a positive surprise.”
Prudential gained 3 percent to 636.5 pence after the insurer reported a 10 percent increase in nine-month sales to 2.7 billion pounds. That compared with the 2.68 million-pound average analyst estimates. The insurer said the U.K. business continues to perform in line with expectations while new- business profit in the U.S. increased 17 percent.
Associated British Foods Plc (ABF) gained 1.4 percent to 1,128 pence after the owner of the Primark discount-clothing chain forecast sales and earnings will rise this year as commodity costs ease.
InterContinental Hotels Group Plc (IHG) dropped 2 percent to 1,073 pence after the owner of the Holiday Inn chain said revenue growth from its rooms slowed in October. Revenue per available room, a measure of room rates and occupancy, rose 4.7 percent in October, compared with 6.4 percent growth for the third quarter.
In Ireland, CRH Plc (CRH) climbed 4 percent to 13.02 euros after the building-materials company said it will move its primary listing to the U.K. while retain a second listing in Dublin. The company also said it expects full-year pretax profit and per- share earnings to be “well ahead” of 2010 results.
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