U.K.’s FTSE 100 Climbs as Old Mutual, Admiral Shares Surge; IPF Declines
U.K. stocks advanced, rebounding from the biggest decline in three weeks, as U.S. economic data topped forecasts and Old Mutual Plc (OML) led insurance companies higher after announcing plans to sell its Nordic operations.
Old Mutual, Britain’s third-largest insurer, surged the most in more than two years. Shares of Prudential Plc (PRU) and Standard Life Plc (SL/) also advanced. Vedanta Resources Plc (VED) led gains in mining companies. Collins Stewart Hawkpoint Plc jumped 75 percent after agreeing to be bought be Canaccord Financial Inc., Canada’s largest non-bank brokerage.
The benchmark FTSE 100 Index gained 34.05, or 0.6 percent, to 5,400.85 at the close in London, paring some of yesterday’s 2.3 percent selloff. The broader FTSE All-Share Index also rose 0.6 percent and Ireland’s ISEQ Index increased 1 percent.
“Markets are staging something of a recovery as traders edge back into assets that suffered the brunt of yesterday’s selling,” said London-based Manoj Ladwa, a senior trader at ETX Capital. “Equities, gold and crude oil are all attracting interest as opportunistic traders pile in for a rebound.”
U.K. stocks (UKX) plunged yesterday after the U.S. Federal Reserve refrained from announcing additional measures to bolster the world’s largest economy. The FTSE 100 has lost 8.3 percent this year amid concern the euro area’s sovereign-debt crisis is spreading to the region’s core economies.
A U.S. report today showed the fewest workers in three years filed claims for jobless benefits last week, indicating the world’s largest economy is strengthening.
The number of applications for unemployment payments dropped by 19,000 to 366,000 in the week ended Dec. 10, less than the lowest forecast of economists surveyed by Bloomberg News and the least since May 2008, according to Labor Department figures. Other reports showed U.S. manufacturing accelerated this month after pausing in November.
Old Mutual soared 11 percent to 123.7 pence, the biggest advance since March 2009, after announcing plans to sell its Nordic unit to Skandia Liv for 2.1 billion pounds ($3.3 billion) to reduce debt.
The sale of Skandia Insurance Co. Ltd. includes Old Mutual’s long-term savings and banking operations in Sweden, Denmark and Norway.
Standard Life, Scotland’s biggest insurer, also advanced in London trading, climbing 2.4 percent to 198.1 pence as a gauge (F3INSUS) of insurance companies rebounded from a three-day selloff. Admiral Group Plc (ADM) increased 1.7 percent to 800.5 pence and Prudential, the U.K.’s largest insurer, rose 2.3 percent to 614.5 pence.
Vedanta gained 1.5 percent to 1,081 pence, Xstrata Plc increased 1 percent to 948 pence and Anglo American Plc gained 1.3 percent to 2,308 pence.
Copper advanced on the London Metal Exchange after yesterday’s 5.1 percent plunge. The base metal is a top commodity pick for next year because of restocking in China, UBS AG said in a report today.
Collins Stewart soared 75 percent to 88.5 pence, the biggest gain since at least 2006. Canaccord agreed to buy the stockbroker for 253.3 million pounds in its largest takeover, expanding the wealth management and investment-banking businesses in the U.K.
International Personal Finance Plc (IPF), which makes unsecured loans to low-income households in eastern Europe, slid 9.2 percent to 165 pence saying currency movements will harm full- year earnings.
The company estimated that currency effects may cut reported full-year profit by as much as 14 percent and said “the global economy continues to make the outlook for 2012 unusually uncertain.”
Elsewhere, Morgan Crucible Co. (MGCR) gained 2.9 percent to 251 pence after Goldman Sachs Group Inc. raised its recommendation for the shares to “buy” from “neutral.”
Hays Plc (HAS) rallied 3.8 percent to 61.1 pence as Barclays Plc initiated coverage of the recruitment company with an “overweight” recommendation.
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