U.K. Stocks Are Little Changed; Ocado Shares JumpTom Stoukas
U.K. stocks were little changed, slipping from the highest level since May 2008, as a report showed U.S. house sales unexpectedly decreased last month.
Ocado Group Plc surged 6.3 percent after saying Stuart Rose will take over as the online grocer’s chairman. Rightmove Plc rallied the most in five months as UBS AG upgraded the shares. Fresnillo Plc led mining shares lower, falling 2.8 percent.
The FTSE 100 Index dropped 1.81 points, or less than 0.1 percent, to 6,179.17 at the close of trading in London, after earlier sliding as much as 0.5 percent as advancing 0.1 percent. The equity benchmark has still gained 4.8 percent this year as U.S. lawmakers agreed on a compromise budget. The broader FTSE All-Share Index fell 0.1 percent today, while Ireland’s ISEQ Index added 0.3 percent.
“There isn’t any real direction,” Michael Hewson, a market analyst at CMC Markets Plc in London, wrote in an e-mail. “Sentiment is still fairly skittish given this morning’s sharp moves, suggesting investors remain nervous about buying too aggressively at these multiyear highs.”
Britain’s cold snap risks pushing the economy into a triple-dip recession as Bank of England Governor Mervyn King completes his final months in office, according to Phil Rush, an economist at Nomura Holdings Inc. Economists already forecast that gross domestic product shrank in the final three months of 2012. King, who steps down in July, may give his outlook for the economy when he delivers his first speech of 2013 to businessmen in Belfast this evening.
In Asia, the Bank of Japan set a 2 percent inflation target and said it will introduce Federal Reserve-style open-ended asset purchases from January 2014.
U.S. sales of existing homes dropped 1 percent to a 4.94 million annual rate last month, falling short of the 5.1 million median estimate of economists surveyed by Bloomberg. A report on Jan. 25 may show that new-house sales rose to a 385,000 annual pace, the largest number since April 2010.
Ocado surged 6.3 percent to 101 pence, its highest price in almost seven months. Rose will join as a non-executive director on March 11 and will replace Michael Grade as chairman after the annual shareholders’ meeting on May 10, the Hatfield, England-based retailer said. Rose was chief executive officer of Marks & Spencer Group Plc from 2004 to 2010.
Rightmove added 2.8 percent to 1,599 pence, its biggest gain in since Aug. 10. UBS will increase its earnings estimates for the U.K.’s biggest residential property website by 13 percent if advertising revenue grows at the same rate as last year, Alex Hugh, an analyst, wrote in a note to clients. Hugh raised his recommendation to buy from neutral and increased his price target to 1,800 pence from 1,600 pence.
BG Group Plc, a U.K. oil and gas company, added 2.3 percent to 1,145 pence, for the biggest gain on the benchmark FTSE 100.
Fresnillo led a gauge of mining companies lower, falling 2.8 percent to 1,725 pence. The producer of precious metals reported silver production of 40.97 million ounces in 2012, compared with 41.87 million ounces in 2011.
Bumi Plc dropped 2.1 percent to 324.5 pence. The London-listed venture founded by Nathaniel Rothschild and Indonesia’s Bakrie family may seek to recover missing funds identified from an investigation into alleged financial irregularities at its coal investments.
Elementis Plc, the world’s largest maker of hectorite-clay additives used in cosmetics, slid 4.2 percent to 212 pence. Bank of America Corp. sold 11.4 million shares at 210 pence each on behalf of an institutional investor, according to two people familiar with the transaction.