Most U.K. Stocks Advance as Economic Growth Tops Forecast
Most U.K. stocks advanced as the British economy expanded at the fastest pace in five years in the third quarter, boosted by Olympic ticket sales and a surge in services.
Unilever (ULVR) rallied the most in 10 weeks as revenue growth topped estimates. Debenhams Plc surged to a five-year high after the retailer boosted online sales targets and said it will add more outlets. Bwin.Party Digital Entertainment Plc (BPTY) gained 6.7 percent after announcing a partnership with Zynga Inc. for online poker and casino games. WPP Plc (WPP) fell 2.3 percent as the world’s largest advertising company cut its revenue forecast.
The FTSE 100 Index (UKX) climbed 0.27 points, or less than 0.1 percent, to 5,805.05 at the close of trading in London, as three stocks rose for every two that fell. The benchmark gauge has rallied 10 percent from this year’s low on June 1 as European Central Bank President Mario Draghi pledged to do everything to protect the euro.
“U.K. GDP printed up a whopping 1 percent quarter-on- quarter increase, much better than expectations,” Ishaq Siddiqi, a market strategist at ETX Capital in London, wrote in in an e-mail. “We were all expecting the summer of sports, the Queen’s Jubilee and public holidays to provide a boost, but were unsure how much.”
The FTSE All-Share Index added 0.1 percent today, while Ireland’s ISEQ Index rose 0.9 percent. The volume of shares changing hands in FTSE 100 companies was 8.5 percent less than the 30-day average, according to data compiled by Bloomberg.
U.K. gross domestic product jumped 1 percent in the third quarter from the previous three months, the Office for National Statistics said in London today. That exceeded the highest estimate in a Bloomberg News survey for growth of 0.8 percent. The median forecast of 33 economists was 0.6 percent.
In the U.S., a government report showed orders for durable goods rose 9.9 in September, the biggest gain since January 2010. Claims for jobless benefits fell by 23,000 to 369,000 last week, according to separate data.
Unilever gained 2 percent to 2,310 pence, the largest advance since Aug. 3. The world’s second-biggest consumer-goods company reported third-quarter revenue growth that beat estimates, led by demand for personal-care products in emerging markets.
So-called underlying sales increased 5.9 percent from a year earlier, the London- and Rotterdam-based maker of Axe body sprays said. The median estimate of 13 analysts surveyed by Bloomberg was for a 5.3 percent gain. Units sold rose 3.4 percent, more than the 2.5 percent gain estimated by analysts.
Debenhams (DEB) surged 9.2 percent to 119 pence, the highest since August 2007. The U.K.’s second-largest department store chain raised its “medium-term” target for online sales to 600 million pounds ($968 million) from 500 million pounds, and increased its five-year goal for franchise stores to 150 from 130. The company reported full-year net income of 125.3 million pounds compared with 117.2 million pounds last year.
Bwin.Party Digital rose 6.7 percent to 125.5 pence. The gambling company entered into an exclusive agreement with Zynga, the world’s biggest maker of social games, to offer real-money online poker and casino games.
Fresnillo Plc (FRES) rose 2.2 percent to 1,930 pence as it approved a feasibility study for the development of its $500 million San Julian silver and gold project.
Salamander Energy Plc (SMDR) gained 5.4 percent to 192.3 pence after the oil explorer predicted a significant increase in output at its Bualuang well off Thailand.
AstraZeneca Plc (AZN) added 0.4 percent to 2,896.5 pence, after earlier climbing as much as 1.5 percent. The U.K.’s second- biggest drugmaker reported third-quarter earnings-per-share of $1.51, beating the $1.45 a share average estimate of 20 analysts compiled by Bloomberg.
Carnival Plc rose 3 percent to 2,505 pence after third- quarter results from industry peer Royal Caribbean Cruises Ltd. (RCL) beat estimates.
WPP dropped 2.3 percent to 789.5 pence, falling for a fifth day. The advertising company cut its full-year sales growth target for the second time in two months as clients in North America and Europe reduced spending. Revenue growth for the year will be 2.5 percent to 3 percent, down from an earlier forecast of about 3.5 percent, the company said.
Asos Plc (ASC), the U.K.’s largest online-only fashion retailer, sank 6.7 percent to 2,326 pence as a 40 percent profit surge wasn’t enough to stop one of the company’s joint brokerage advisers from cutting its rating. Numis Securities Ltd. lowered its recommendation to add from buy, citing “an exceptional run” by the shares, which had more than doubled this year.
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