U.K. Stocks Are Little Changed on Bernanke Speech
U.K. stocks were little changed, following a three-day slide for the benchmark FTSE 100 Index, as Federal Reserve Chairman Ben S. Bernanke said he does not rule out further bond buying by the central bank.
Xstrata Plc (XTA) and Glencore International Plc (GLEN) contributed the most to a rally by a gauge of U.K. mining stocks. Lavendon Group Plc (LVD) surged 5.8 percent after the maker of aerial work platforms doubled its dividend. Redrow Plc (RDW) gained 2.7 percent after a group led by its chairman made a takeover approach.
The FTSE 100 Index declined 0.1 percent to 5,711.48 at the close in London, after earlier falling as much as 0.2 percent and rallying as much as 0.8 percent. The equity benchmark dropped 1.1 percent this week, paring its gain in August to 1.4 percent. The broader FTSE All-Share Index was little changed today, while Ireland’s ISEQ Index advanced 1 percent.
“Bernanke repeated what was expected: the Fed remains committed to the economy and -- if it needs support -- they will provide the necessary accommodation,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “Markets will have to wait until the next FOMC meeting to see how the cards fall,” he said, referring to the Federal Open Market Committee meeting next month.
Bernanke said the unemployment rate in the world’s largest economy has seen no improvement since January. He leads an FOMC meeting on Sept. 12-13 to decide whether to further stimulate the economy in an attempt to encourage hiring.
“The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant,” Bernanke said today in a speech to central bankers and economists at an annual forum in Jackson Hole, Wyoming.
Xstrata soared 5.7 percent to 952.2 pence, while Rio Tinto Group, the world’s third-largest mining company, climbed 0.7 percent to 2,735.5 pence. Kazakhmys Plc (KAZ) advanced 1.1 percent to 593 pence. A gauge of mining stocks listed on the FTSE 350 Index rose 1.6 percent.
Glencore International Plc jumped 7.7 percent to 385.05 pence. MSCI Inc. will adjust Glencore’s weighting in its benchmark indexes on Sept. 1, according to a report from BMO Capital Markets dated May 18.
Redrow advanced 2.7 percent to 155.1 pence after a group led by the U.K. housebuilder’s chairman, Steve Morgan, made a takeover approach. Bridgemere Securities Ltd., which Morgan leads, Toscafund Asset Management LLP and Penta Capital LLP said in a statement that they may offer 152 pence a share for Redrow, which would value the company at 562 million pounds.
Bwin.Party Digital Entertainment Plc (BPTY) dropped 5 percent to 94.1 pence as the gambling company said average gross daily revenue fell 11 percent in the eight weeks ended Aug. 25 after a late start to Germany’s soccer season.
To contact the reporter on this story: Namitha Jagadeesh in London at email@example.com
To contact the editor responsible for this story: Andrew Rummer at firstname.lastname@example.org