U.K. Stocks Close Little Changed after U.S. GDP Data
The U.K.’s FTSE 100 Index (UKX) closed little changed, erasing an earlier selloff, after U.S. economic data bolstered confidence in the world’s largest economy, offsetting investor concerns about company earnings.
Anglo American rallied 4.1 percent after announcing the resignation of its chief executive officer. Weir Group Plc (WEIR) climbed 1.7 percent amid speculation U.S. rival Gardner Denver Inc. may be taken over. ARM Holdings Plc (ARM) fell 1.3 percent after Apple Inc.’s profit forecast missed analyst estimates.
The benchmark FTSE 100 rose 1.66 points, or less than 0.1 percent, to 5,806.71 at the close in London, erasing an earlier loss of as much as 0.9 percent after U.S. gross domestic product figures topped forecasts. The gauge declined 1.5 percent this week after company earnings disappointed investors.
The U.S. data “is broadly in line with the Federal Reserve’s projections of growth remaining slightly below 2 percent in 2012, confirming the moderate pace of activity,” Annalisa Piazza, a strategist at Newedge Group in London, wrote in a note to clients. “The underlying trend is a touch stronger than headline figures suggest.”
The FTSE All-Share Index fell less than 0.1 percent, paring losses of as much as 0.9 percent, while Ireland’s ISEQ Index climbed 0.2 percent. The volume of shares changing hands in FTSE 100 companies was 12 percent lower than the 30-day average, according to data compiled by Bloomberg.
The U.S. data follows yesterday’s U.K. report that showed the British economy expanded at the fastest pace in five years. Today’s Commerce Department figures showed GDP, the value of all goods and services produced in the U.S., rose at a 2 percent annual rate, beating the median economist forecast of a 1.8 percent gain, after climbing 1.3 percent in the prior quarter.
Stocks also advanced after Laurence D. Fink, chairman and chief executive officer of Blackrock Inc., the world’s largest asset manager, told CNBC that he believes Spain will seek a second European bailout next week. Spanish data today showed unemployment rose to a record 25 percent in the third quarter.
Anglo American climbed 4.1 percent to 1,933.5 pence, for the biggest advance on the FTSE 100, after the company said Chief Executive Officer Cynthia Carroll will quit and also step down as chairman of Anglo American Platinum Ltd. and De Beers. The metal producer has lost almost a quarter of its value during her five-year tenure.
Weir Group gained 1.7 percent to 1,717 pence after rival Gardner Denver late yesterday said it’s studying options including a sale or a merger and has appointed Goldman Sachs Group Inc. as its adviser.
Reuters reported that private equity firms including KKR & Co. and Blackstone Group LP are considering making offers for the U.S. company, citing people familiar with the matter whom it didn’t identify.
Burberry Group Plc, the U.K.’s largest luxury maker, rose 1.7 percent to 1,153 pence. French rival PPR SA reported a 16 percent increase in third-quarter sales and said it’s confident of revenue and profit growth in 2012.
Man Group Plc (EMG) climbed 2.3 percent to 81.85 pence, extending yesterday’s 3.9 percent advance. U.K. newspapers including The Daily Mail and The Telegraph cited takeover speculation for the hedge-fund manager’s gain. The stock had slumped 17 percent the previous six sessions.
ARM, whose chip designs power Apple’s iPhone, lost 1.3 percent to 656.5 pence. The shares earlier fell as much as 2.9 percent after Apple forecast profit that missed analyst estimates amid rising competition from Samsung Electronics Co., Microsoft Corp. and Amazon.com Inc.
Apple also said gross profit margin, the proportion of sales left after deducting production costs, will fall to about 36 percent, the lowest level in more than four years.
Kazakhmys Plc (KAZ) slid 2.9 percent to 714.5 pence as Macquarie Group Ltd. downgraded the copper producer to neutral, the equivalent of hold, from outperform.
African Barrick Gold Plc (ABG) retreated 3.4 percent to 465 pence after it said it will miss a production target for the third straight year as illegal miners and operational issues continue to hold back its mines. The precious metal producer forecast full year production about 5 percent to 10 percent below the bottom of its previous range.
Elementis Plc (ELM) dropped 5.6 percent to 204.9 pence after the world’s largest maker of hectorite-clay additives used in cosmetics said a temporary slowdown in shale drilling will weigh on annual profit. Full-year earnings per share may still meet analysts’ expectations because of a lower group tax charge, the company said.
Asos Plc (ASC), the largest online-only fashion retailer, retreated 4.8 percent to 2,215 pence after directors and other executives sold shares in the company.
Numis Securities handled the sale of 2.75 million shares at 2,150 pence each in a placement that was oversubscribed, according to a person familiar with the transaction.
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