U.K. Stocks Rise to Six-Month High on Fed Stimulus
Mining stocks rallied as copper prices rose, with Rio Tinto Group (RIO) and BHP Billiton Ltd. (BLT) climbing at least 6 percent. HSBC Holdings Plc (HSBA) and Barclays Plc (BARC) led banking shares higher. JD Wetherspoon Plc gained 3.3 percent after posting full-year earnings that beat estimates.
The FTSE 100 (UKX) rose 95.63 points, or 1.6 percent, to 5,915.55 at the close in London, the highest level since March 19. The gauge has gained 2.1 percent this week and 12 percent since its 2012 low on June 1 as European Central Bank policy makers agreed on an unlimited bond-buying program and optimism mounted the Fed would announce a third round of quantitative easing. The broader FTSE All-Share Index added 1.7 percent today, while Ireland’s ISEQ Index climbed 1.2 percent.
“Short of throwing money out of a helicopter, there is little more that Ben Bernanke could have done to enthuse markets this much,” said Chris Beauchamp, a market analyst at IG Index in London. “Mr Bernanke has lashed himself to the mast of economic stability, throwing the weight of the world’s most powerful central bank behind the US economy. Combine that with signs of progress in the euro zone, and we now have the potential for markets to push yet higher.”
Fed Chairman Ben S. Bernanke yesterday said the central bank will buy $40 billion of mortgage-backed securities a month, without setting a limit on the ultimate amount it would buy or the duration of the program. The Fed also extended its near-zero interest rate policy until 2015 and said it will stay accommodative “for a considerable time” even after the economy strengthens.
The volume of shares changing hands on the FTSE 100 was 84 percent more than the average of the last 30 days, according to data compiled by Bloomberg.
An index of London-listed mining stocks jumped 7.2 percent, the most since October 2011, as copper rose and Australia’s Treasurer said the country’s resource boom will continue. Investments in mining and energy projects “still have some way to run,” Wayne Swan told the Australia in China’s Century conference in Sydney today, according to a text of his speech.
Rio Tinto surged 6.6 percent to 3,281.5 pence and BHP gained 6 percent to 2,049 pence.
Australia’s highest court today struck down previous orders by a tribunal that had ruled that BHP and Rio should share access to their railroads with Fortescue Metals Group Ltd., returning the dispute to the Australian Competition Tribunal.
Anglo American Plc jumped 9.2 percent to 2,084 pence and Xstrata Plc climbed 6.8 percent to 1,060.5 pence. Antofagasta Plc (ANTO) rallied 7.8 percent to 1,334 pence, the most since November.
A gauge of British banking shares listed on the FTSE 350 Index gained 3.3 percent to the highest level since March.
HSBC added 2.9 percent to 584.4 pence, while Barclays advanced 5.1 percent to 229.05 pence. Standard Chartered Plc (STAN) rose 3.8 percent to 1,506.5 pence.
Wetherspoon (JDW) rose 3.3 percent to 475.7 pence after the U.K. pub owner said full-year pretax profit before exceptional items was 72.4 million pounds ($117.2 million), exceeding the average analyst estimate of 69.2 million pounds in a Bloomberg News survey.
Pace Plc (PIC) slid 9.7 percent to 162.5 pence after the Financial Times reported that set-top boxes supplied by the company didn’t meet BT Group Plc’s requirements. BT had planned to use them for its Internet television service YouView.
GlaxoSmithKline Plc (GSK) lost 1.5 percent to 1,417.5 pence and Reckitt Benckiser Group Plc slid 1.7 percent to 3,572 pence. A gauge of healthcare stocks was the worst-performing of the 19 industry groups on the Stoxx Europe 600 Index today.
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