U.K. Stocks Advance to a Five-Week High as Miners Climb
U.K. stocks were little changed from a five-week high as investors awaited minutes from the Federal Open Market Committee’s June meeting for further indications of the U.S. central bank’s readiness to reduce stimulus.
Burberry Group Plc jumped 4.4 percent after the luxury-goods retailer beat sales estimates. G4S Plc (GFS) declined 2.3 percent as Goldman Sachs Group Inc. advised selling the shares before the security-services company reports financial results.
The FTSE 100 (UKX) added 7.59 points, or 0.1 percent, to 6,520.67 at 9:07 a.m. in London. The gauge rallied 2.6 percent last week, its second-largest increase this year, as the Bank of England and the European Central Bank pledged to keep rates low for the foreseeable future. The FTSE All-Share Index fell less than 0.1 percent today, while Ireland’s ISEQ Index dropped 0.2 percent.
“I am surprised by the strength of the economy in the U.S.,” said Mark Glazener, head of global equities at Robeco Groep NV in Rotterdam, the Netherlands, where he helps oversee $243 billion. “There is definitely a fiscal drag, but if you take that out of the equation, growth in the U.S. is impressive. We are overweight equities, still mainly because you have valuations that are the main underpin rather than earnings expectations.”
The Fed releases the minutes of its June meeting at 2 p.m. New York time today. Speaking after that meeting, Chairman Ben S. Bernanke said the central bank may reduce the pace of its $85 billion in monthly bond buying later in 2013, and may halt purchases around mid-2014 if the U.S. economy performs as the Fed forecasts.
“We will be watching to see if the June minutes add any additional color on this subject,” UBS AG economists led by Maury Harris in New York, wrote in a report dated July 9. “Potentially providing guidance on not only when the Fed will begin to taper but also when it will finish.”
Burberry rose 4.4 percent to 1,503 pence. The U.K.’s largest luxury-goods maker reiterated its forecasts for the year after sales of its spring-summer collection lifted first-quarter retail revenue more than analysts estimated.
Retail revenue advanced 21 percent to 339 million pounds ($505 million) in the three months ended June 30, London-based Burberry (BRBY) said today. Analysts predicted 316 million pounds based on the median of nine estimates compiled by Bloomberg News. Same-store sales increased 13 percent, beating the 5 percent analysts had predicted.
G4S dropped 2.3 percent to 224.3 pence. Goldman Sachs wrote in a report to investors that there is a risk that first-half results may disappoint, with margins for the second quarter narrowing from the previous three months. The shares are a “conviction sell,” the bank wrote. G4S is due to report its earnings on Aug. 28.
The number of shares changing hands on FTSE 100-listed companies was 10 percent higher than the average of the past 30 days, data compiled by Bloomberg shows.
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