U.K. Stocks Gain as Chinese Manufacturing Expands
U.K. stocks rose for a fourth day, their longest winning streak in five weeks, as a report indicated that China’s manufacturing industry will expand this month for the first time in more than a year.
SABMiller Plc (SAB) posted the biggest gain on the FTSE 100 Index (UKX) after reporting first-half earnings that beat analysts’ estimates. Glencore International Plc (GLEN) and Xstrata Plc (XTA) paced a rally in mining stocks, each advancing more than 1.5 percent. Daily Mail & General Trust Plc (DMGO) jumped the most since 2009 after announcing it will buy back shares over the next year.
The benchmark FTSE 100 rose 39 points, or 0.7 percent, to 5,791.03 at the close in London. The equity benchmark has rallied 10 percent from this year’s low on June 1 as the European Central Bank agreed on an unlimited bond-buying plan and the Federal Reserve began a third round of asset purchases in the U.S. The broader FTSE All-Share Index also added 0.7 percent today, while Ireland’s ISEQ Index climbed 0.4 percent.
“With the U.S. and China doing better, the world economy might have a bit of a breather,” Virginie Maisonneuve, who helps oversee 202.8 billion pounds ($323 billion) as head of global and international equities at Schroder Investment Management Ltd., said in an interview on Bloomberg Television. “We’re trying to see if we have reached the end of the deterioration, which is possible.”
In China, the preliminary reading for a purchasing managers’ index increased to 50.4 in November from a final figure of 49.5 in October, according to a release by HSBC Holdings Plc and Markit Economics. The reading, which climbed above 50 for the first time in 13 months, signals expansion.
Euro-area factory output contracted less than economists had estimated, a Markit Economics report showed. The measure of manufacturing climbed to 46.2 this month from 45.4 in October. That beat the average economist estimate of 45.6 in a Bloomberg survey. Separate manufacturing PMIs for Germany and France, Europe’s two biggest economies, also beat projections.
SABMiller surged 6.4 percent to 2,801 pence, its biggest rally in 13 months. The world’s second-largest brewer said first-half earnings before interest, taxes and amortization and excluding some items rose to $3.17 billion. That compared with the $3.1 billion-average analyst estimate.
A gauge of mining stocks listed on the FTSE 350 Index advanced 0.8 percent. Glencore International Plc increased 2 percent to 340.7 pence, Xstrata gained 1.7 percent to 1,014 pence and Lonmin Plc (LMI) rose 2.4 percent to 299.1 pence.
Glencore and Xstrata extended their advance after the European Commission approved its $33 billion takeover of Xstrata Plc. Competition Commissioner Joaquin Almunia said Glencore’s offer to stop buying zinc from Nyrstar NV ensured that the market for the metal would remain competitive.
Daily Mail jumped 11 percent to 524 pence, its largest advance since April 2009, after saying it will buy back as much as 100 million pounds of shares over the next year.
The publisher of the Daily Mail newspaper also reported full-year adjusted earnings of 49.4 pence a share, exceeding the average analyst estimate of 48.3 pence per share. Liberum Capital said that the company’s business-to-business assets will perform well over the next 12 months.
Mothercare Plc (MTC) rallied 3.8 percent to 303 pence after reporting a first-half underlying pretax loss of 600,000 pounds, narrower than the average analyst estimate of 3.2 million pounds. The results show encouraging signs that the children’s clothing retailer will recover, Numis Securities wrote in a report. The brokerage raised its price target on the shares.
Hochschild Mining Plc (HOC), a silver producer with operations in Latin America, dropped 1 percent to 487.3 pence. Goldman Sachs Group Inc. cut its recommendation on the shares to sell from neutral. The brokerage said that European silver-mining stocks look expensive.
The volume of shares changing hands in FTSE 100 companies was 39 percent lower than the 30-day average, according to data compiled by Bloomberg. U.S. markets are closed today for the Thanksgiving holiday.
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