U.K. Stocks Advance as U.S. Jobs Data Beat Estimates
U.K. stocks advanced after a report showed companies in the U.S. added more workers to payrolls in September than economists had predicted.
London Stock Exchange Group Plc (LSE) rose 2.5 percent a day after Vanguard Group Inc. selected the FTSE Group to provide indexes for its international funds. Tesco Plc (TSCO) fell 2.6 percent as it posting its first drop in profit in almost two decades. FirstGroup Plc (FGP) slumped 21 percent as the government stripped the company of the West Coast rail franchise.
The FTSE 100 Index (UKX) added 16.36 points, or 0.3 percent, to 5,825.81 at the close in London, before the monthly U.S. payrolls report on Oct. 5. The equity benchmark dropped 1.9 percent last week as Germany and France disagreed on when to start a banking union in the euro area and concern grew that the latest round of U.S. stimulus will fail to encourage economic growth. The FTSE All-Share Index advanced 0.2 percent today, while Ireland’s ISEQ Index gained 0.4 percent.
“The encouraging thing is that even if the Europeans can’t get their houses in order, the world’s biggest economy is in good shape, creating jobs and growing which is good for the globally exposed stocks of the FTSE 100,” said Angus Campbell, head of market analysis at Capital Spreads in London. “This bodes well for this Friday’s non-farm payroll.”
In the U.S., the ADP Employer Services report showed private employers hired 162,000 workers in September, from a revised 189,000 jump in August. The median estimate of economists surveyed by Bloomberg had called for an increase of 140,000 workers.
The Institute for Supply Management’s non-manufacturing index, which covers almost 90 percent of the economy, rose to 55.1 in September from 53.7 the previous month. That exceeded the 53.4 median estimate of economists surveyed by Bloomberg.
Spain has no plans to ask for a bailout soon, Prime Minister Mariano Rajoy said in Madrid yesterday after the close of trading.
In China, an index that surveys purchasing managers in non- manufacturing industries fell to 53.7 in September from 56.3 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing today.
LSE advanced 2.5 percent to 980 pence. MSCI Inc. slumped 27 percent in New York trading yesterday. Vanguard, the largest U.S. mutual-fund provider, said yesterday it will use FTSE’s equity benchmarks rather than those from MSCI for six international stock-index funds.
EasyJet Plc (EZJ) climbed 3.5 percent to 615 pence, its highest price since January 2008, after predicting full-year pretax profit of at least 310 million pounds ($498 million). Europe’s second-biggest discount airline had forecast profit of no more than 300 million pounds.
Dunelm Group Plc (DNLM) jumped 3.8 percent to 680 pence after the budget home-furnishings retailer said same-store sales rose 3 percent in the first quarter, beating the average analyst estimate of a 2.7 percent increase.
Tesco slid 2.6 percent to 327.95 pence after the U.K.’s largest retailer said trading profit, a measure that excludes gains from property, declined 11 percent to 1.59 billion pounds over the six months ended Aug. 25.
FirstGroup plunged 21 percent to 193.4 pence, its biggest- ever drop. Transport Secretary Patrick McLoughlin said in a statement that “serious technical flaws” were found in the franchise process. Virgin Trains may now retain the contract to operate services between London and Glasgow. Stagecoach Group Plc (SGC), which owns a stake 49 percent stake in the rail unit of Virgin Group, climbed 1.9 percent to 288.8 pence.
Lamprell Plc (LAM) sank 36 percent to 70 pence, its lowest price since April 2009, after saying its full-year loss will be wider than it had predicted. In August, the oil-rig engineer forecast a $17 million loss for 2012. Lamprell has plummeted 73 percent so far this year.
The FTSE 100 has failed to post back-to-back gains or losses for the last eight days, data compiled by Bloomberg show.
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