U.K. Stocks Extend 2007 High on Industrial Production
U.K. stocks climbed for a sixth day, extending the highest level for the FTSE 100 Index in 5 1/2 years, as industrial production topped forecasts and the Bank of England maintained its asset-purchase target.
Experian Plc (EXPN) jumped to the highest since it was spun out of GUS Plc in 2006 after raising its dividend. Old Mutual Plc (OML) advanced 2.3 percent as the biggest insurer in Africa reported funds under management that topped estimates. Wm Morrison Supermarkets Plc (MRW) dropped 2.7 percent as sales fell. British Sky Broadcasting Group Plc slid the most in 22 months as BT Group Plc (BT/A) announced a rival sports television venture.
The FTSE 100 gained 9.26 points, or 0.1 percent, to 6,592.74 at the close in London, the highest level since October 2007. The benchmark gauge has surged 12 percent this year as central banks maintained stimulus measures. The broader FTSE All-Share Index added 0.2 percent today, while Ireland’s ISEQ Index lost 0.4 percent.
“We’ve had a good run with U.K. stocks, so investors are looking to shuffle their sector exposure,” said Guy Foster, London-based head of portfolio strategy at Brewin Dolphin Securities Ltd., which manages about 26 billion pounds ($40 billion). “The improving industrial data we have seen underline the case for a no-change policy, but doves may suggest that it is precisely because of the weak pound that our manufacturing sector is waking from its slumber.”
The number of shares changing hands in companies on the FTSE 100 was 7.5 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.
The Bank of England’s Monetary Policy Committee kept its bond-buying program at 375 billion pounds, matching the median forecast of economists in a Bloomberg survey. The central bank also held its interest rate unchanged at 0.5 percent as economists had projected.
The decisions followed Governor Mervyn King’s penultimate meeting before he is replaced by Bank of Canada chief Mark Carney on July 1.
U.K. industrial production rose more than economists had forecast in March. Output increased 0.7 percent after gaining a revised 0.9 percent in February, the Office for National Statistics said today. Economists had called for the measure to climb 0.2 percent.
Experian rallied 6.4 percent to 1,247 pence, the highest since October 2006, after posting full-year earnings of 85.7 cents a share. That beat the average analyst estimate of 83.6 cents. The world’s largest credit-checking company announced a second interim dividend of 24 cents a share, increasing its full-year dividend by 8.6 percent to 34.75 cents.
Old Mutual advanced 2.3 percent to 220.4 pence as funds under management from core operations rose 10 percent to 288.4 billion pounds in the first quarter, helped by rising equity markets and higher inflows into its U.S. and African business. That beat the average analyst estimate of 276.9 billion pounds.
Morrison, the smallest of the U.K.’s four main supermarket chains, slipped 2.7 percent to 288.4 pence. Comparable sales, excluding gasoline and value-added taxes, dropped 1.8 percent in the first quarter, matching the average projection of analysts surveyed by Bloomberg.
The retailer will “definitely not” report an increase in comparable sales this year, Chief Executive Officer Dalton Philips said on a conference call.
BSkyB (BSY) slid 6.2 percent to 809 pence, the biggest retreat since July 2011, after BT unveiled a sports channel to compete with the pay-TV company. BT Sport, which offers three channels, will cost pubs about 80 percent less than Sky, Marc Watson, head of BT’s Vision service, said at a press conference.
BT shares declined 2.3 percent to 275.7 pence. TalkTalk Telecom Group Plc (TALK) sank 12 percent to 221.6 pence, the largest drop since the British broadband provider split off from Carphone Warehouse Group Plc in March 2010.
Standard Chartered Plc (STAN) retreated 2.5 percent to 1,584 pence as JPMorgan Chase & Co., Numis Securities Ltd. and RBC Capital Markets LLC downgraded the shares. Exane BNP Paribas cut its price estimate by 9 percent to 1,600 pence and UBS AG removed the stock from its list of key calls in Europe.
The British lender yesterday slid the most in nine months after saying operating profit fell in the first quarter.
Eurasian Natural Resources Corp. fell 3.9 percent to 291.5 pence after saying it hasn’t received any proposals that could lead to an offer. The miner, whose shares have slumped 43 percent in a year, also said first-quarter ferroalloys output fell 2.8 percent because of maintenance at its Aksu plant.
Separately, Morgan Stanley and Deutsche Bank AG stepped down as ENRC’s corporate brokers.
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