U.K. Stocks Advance as GDP Grows More Than Estimated
U.K. stocks advanced as a report showed economic growth accelerated in the second quarter more than initially forecast.
Croda International Plc (CRDA) climbed 4.3 percent after Deutsche Bank AG raised its rating on the world’s second-largest maker of cosmetic ingredients to buy from hold. Henry Boot Plc, the property company that built Pinewood film studios, rose 6.4 percent after reporting its latest results.
The FTSE 100 added 45.23 points, or 0.7 percent, to 6,492.1 at the close of trading in London, paring its weekly loss to 0.1 percent. The index has traded between 6,386.72 and 6,516.71, a 2 percent range, for the past six sessions amid speculation the Federal Reserve will taper bond buying as soon as next month. The broader FTSE All-Share Index also rose 0.7 percent, while Ireland’s ISEQ Index increased 0.2 percent.
“The FTSE 100 (UKX) is stuck in a range and it is difficult to see it popping out amid persistent tapering talk and volatility,” Ishaq Siddiqi, a London-based market strategist at ETX Capital in London, said in a phone interview. “All facets of the U.K. economy have gathered steam, but the FTSE 100 will need to break above 6,520 to carry on its rally.”
The volume of shares changing hands in FTSE-100 listed companies was 20 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Gross domestic product increased 0.7 percent from the first quarter, when it rose 0.3 percent, the Office for National Statistics said in London today. That compared with an initial estimate of 0.6 percent. Exports rose the most in more than a year and net trade contributed 0.3 percentage point to GDP.
Euro-area consumer confidence increased more in August than economists estimated. An index of household sentiment improved for a ninth month to minus 15.6, the highest level since July 2011, from minus 17.4 in the previous month, the European Commission said in a preliminary report today. Economists had forecast an increase to minus 16.5, according to the median of 26 estimates in a Bloomberg News survey.
Purchases of new U.S. homes plunged in July by the most in more than three years and previous months were revised down.
Sales of newly built homes declined 13.4 percent to a 394,000 annualized pace, the weakest since October, following a 455,000 rate in the prior period that was lower than previously estimated, Commerce Department figures showed today in Washington. The median estimate of 74 economists surveyed by Bloomberg called for a decrease to 487,000.
Croda climbed 4.3 percent to 2,677 pence, its biggest gain since October. Deutsche Bank upgraded its stance on the shares to buy from hold.
“Top-line growth has slowed over the past year and lagged some of its consumer-focused peers in chemicals,” analysts at Deutsche Bank, led by Martin Dunwoodie, wrote in a report distributed today. “We view this slowdown as cyclical rather than structural and expect sales growth to accelerate.”
Henry Boot (BHY) advanced 6.4 percent to 198.5 pence. The company said business has been in line with forecasts and predicted an improvement in the trading environment. First-half revenue almost doubled from a year earlier to 81.8 million pounds ($123 million), while net income advanced to 4.7 million pounds from 2.9 million pounds, it said.
Afren Plc (AFR) declined 0.2 percent, paring earlier losses of as much as 5.8 percent, after reporting first-half results. The U.K.-based oil and gas company focused on West Africa and Iraq said profit after tax fell 39 percent in the period while revenue rose 2 percent.
Carpetright Plc (CPR) dropped 0.8 percent to 665 pence. The U.K.’s largest carpet and flooring retailer and five other domestic companies are misleading consumers by inflating prices before offering discounts, the Office of Fair Trading said as it asked the stores to stop the practice.
“There is no suggestion in the letter of Carpetright having behaved in a manner which breaches competition law,” the retailer said in a statement after receiving the OFT’s request.
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