U.K. Stocks Climb as U.S. Payrolls Data Beats Forecasts
U.K. stocks rose to a seven-week high, with the FTSE 100 (UKX) Index completing a second week of gains, as a report showed that U.S. employers hired more workers last month than economists had forecast.
Commodity producers increased as base metals rallied, with BHP Billiton Ltd. (BHP), the largest mining company, climbing 3.7 percent. Man Group (EMG) Plc soared 13 percent on a plan to redeem debt. Royal Bank of Scotland Group Plc dropped by the most in two months after Britain’s biggest state-owned lender reported operating profit that fell short of analysts’ estimates.
The FTSE 100 surged 60.75 points, or 0.9 percent, to 6,521.46 at the close of trading in London, the highest level since March 14. The equity benchmark completed an 11-month rally in April, its longest stretch of gains since the index started in 1984. The gauge advanced 1.5 percent this week. The broader FTSE All-Share Index added 1 percent today, while Ireland’s ISEQ Index rallied 1.3 percent.
“In the light of some of the cut-backs that the government has been communicating to the American people lately, these numbers are good,” said Michael Morris, who oversees about $1 billion as head of European equities at Mitsubishi UFJ Asset Management in London. “This supports the view that the U.S. economy is recovering. It’s not an impressive recovery, but it’s one which is absent from most major economies.”
In the U.S., Britain’s biggest trading partner, payrolls expanded by 165,000 workers last month following a revised 138,000 increase in March that was larger than first estimated, Labor Department figures showed. The median forecast of 90 economists surveyed by Bloomberg projected a 140,000 gain.
The euro-area economy will shrink more than previously expected in 2013, the European Commission said in new forecasts today. Gross domestic product in the 17-nation region will fall 0.4 percent this year, compared with a February prediction of a 0.3 percent drop, the Brussels-based commission said.
The volume of shares changing hands in FTSE 100-listed companies was 9.9 percent more than the 30-day average today, according to data compiled by Bloomberg.
A gauge of London-listed mining stocks increased the most in three weeks as base metals gained on the London Metal Exchange. BHP Billiton added 3.7 percent to 1,847.5 pence and Rio Tinto Group climbed 4 percent to 3,022.5 pence. Eurasian Natural Resources Corp. rallied 12 percent to 292.7 pence, a six-week high.
Glencore Xstrata Plc rose 3.9 percent to 343.95 pence on its first trading day as a combined company. Glencore International Plc (GLEN) completed a $29 billion takeover of Xstrata Plc yesterday, forming the world’s biggest zinc miner and exporter of coal for power stations.
Man Group surged 13 percent to 120 pence, the highest price in more than a year. The world’s largest publicly traded hedge fund manager may buy back shares or pay a special dividend as it seeks to reduce its $920 million of surplus capital, Chief Executive Officer Emmanuel Roman said today.
RBS lost 5.7 percent to 289.8 pence, its biggest decline since Feb. 28. Operating profit declined to 829 million pounds ($1.3 billion) from 1.16 billion pounds a year earlier, the lender said in a statement today. That missed the 1.2 billion- pound estimate of six analysts in a Bloomberg survey.
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