U.K. Stocks Climb to Seven-month High as EU Leaders Meet
The U.K.’s FTSE 100 Index climbed for a fourth day, reaching a seven-month high, as European Union leaders gathered in Brussels to tackle the region’s debt crisis.
Mining companies pushed the benchmark gauge higher in late afternoon trading as shares of Kazakhmys Plc (KAZ) and Rio Tinto Group rallied more than 2 percent. Man Group Plc (EMG) dropped the most in almost 11 months after the hedge-fund manager reported a 57 percent increase in outflows. SABMiller Plc (SAB) declined 2.1 percent after sales fell short of estimates.
The FTSE 100 Index advanced 0.1 percent to 5,917.05 at the close in London. Two shares rose for each that declined in the measure, which has gained 2.1 percent so far this week, boosted by a pick-up in U.S. housing and retail data. The index has climbed 12 percent from its 2012 low on June 1. The FTSE All-Share Index added 0.1 percent today, while Ireland’s ISEQ Index fell 0.3 percent.
“I worry if we are getting a little bit ahead of ourselves,” Karen Olney, head of thematic equity strategy at UBS AG, said on Bloomberg Television in London. “There are a lot of things that still need to be sorted out in Europe. Expectations are high so maybe as earnings come down a bit and we get a couple of bumps along the way after the summit, the markets will sell off a bit.”
EU leaders gathered this afternoon in Brussels for the summit as French President Francois Hollande warned that efforts to stem the debt crisis may unravel if the EU fails to deliver on its promises. He called on the euro area to press ahead with banking union.
Chinese data today showed gross domestic product expanded 7.4 percent in the third quarter from a year earlier, matching the median estimate in a Bloomberg News survey. GDP rose 2.2 percent from the prior period, a four-quarter high.
A gauge of mining companies climbed for third day. Kazakhmys increased 2.7 percent to 780.5 pence, Rio Tinto gained 2.4 percent to 3,260 pence and Antofagasta Plc (ANTO) added 1.7 percent to 1,327 pence.
International Consolidated Airlines Group SA (IAG) and IMI Plc also paced gains today, jumping 3.9 percent to 163.8 pence and 3.5 percent to 943.5 pence respectively.
Mothercare Plc (MTC) surged 11 percent to 257.25 pence after the retailer reported a 0.3 percent increase in second quarter U.K. like-for-likes sales. The average analyst forecast was for a 5.1 percent drop. International retail sales rose 10.8 percent.
Ferrexpo Plc (FXPO) climbed 1.7 percent to 210.1 pence after the mining company said its growth projects are on track.
Booker Group Plc (BOK) jumped 6.6 percent to 100.6 pence after reporting a 3.3 percent rise in first-half sales and saying that the second half of the year so far was ahead of last year.
Man Group dropped 9.9 percent to 83.4 pence, its steepest fall since November, after the world’s biggest publicly traded hedge-fund manager said clients pulled a net $2.2 billion from the firm, up from $1.4 billion in the second quarter.
Customers redeemed a gross $5.2 billion from Man Group’s investment funds, compared with $3 billion of sales, amid an environment for sales that Chief Executive Officer Peter Clarke called “subdued.”
SABMiller declined 2.1 percent to 2,599 pence after the world’s biggest brewer reported a 4 percent increase in organic lager volume in the six months through Sept. 30. That compared with the median analyst estimate of a 4.4 percent gain and was lower than the first quarter’s 5 percent increase.
Sales growth in Latin America and Africa also fell short of median estimates, while volumes in Europe increased 9 percent, outpacing the 6 percent estimate.
Unilever Plc (ULVR) declined 1.1 percent to 2.320 pence after Nestle SA, the world’s biggest food company, reported sales growth that missed analyst estimates as demand stumbled in emerging markets. Danone yesterday posted the weakest dairy product sales growth in more than three years.
British Sky Broadcasting Group Plc (BSY), the U.K’s biggest pay-TV operator, lost 2.1 percent to 733.5 pence after Sweden’s Modern Times Group AG reported third-quarter results that missed analyst forecasts and warned that Denmark’s television advertising market continued to worsen in the fourth quarter.
The Scandinavian market is an “important lead indicator for the U.K.,” wrote Bank of America Corp. analysts, Bianca Dallal and Daniel Kerven, in a report to clients. “The MTG warning and increased investment in response to rising competition should be seen as a significant read-across for BSkyB which is facing the same issues in the U.K.”
Capital Shopping Centres Group Plc dropped 1.8 percent to 333.4 pence after Barclays Plc placed 35.3 million shares in the U.K.’s largest specialist mall operator. The shares were offered between 328 pence to 330 pence apiece, according to two people familiar with the transaction.
Capital & Counties Properties Plc (CAPC), part owner of London’s Covent Garden Market, slid 3.6 percent to 223.5 pence after Simon Property Group Inc. sold a stake in the company. UBS AG placed the 38.9 million shares on behalf of Simon Property at 225 pence each, according to terms obtained by Bloomberg News.
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