U.K. Stocks Advance on German Business Confidence ReportTom Stoukas
U.K. stocks rose, rebounding from the biggest decline in almost seven months, as a report showed that German business confidence improved more than forecast.
CRH Plc led construction shares higher, climbing 4.3 percent. Elan Corp. surged 4.2 percent in Dublin after saying it will buy back $1 billion of shares. G4S Plc fell after the provider of security guards was downgraded by HSBC Holdings Plc.
The FTSE 100 Index advanced 44.16 points, or 0.7 percent, to 6,335.7 at the close of trading in London, for a weekly gain of 0.1 percent. The gauge has rallied 7.4 percent this year after U.S. lawmakers agreed on a compromise federal budget. The broader FTSE All-Share Index also added 0.7 percent today, while Ireland’s ISEQ Index surged 1.9 percent.
“We’re seeing a bit of a rebound today, with selling pressure abating,” said Witold Bahrke, who helps oversee $55 billion as senior strategist at PFA Pension A/S in Copenhagen.
The volume of shares changing hands in FTSE 100-listed companies was 5.4 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
In Germany, the Ifo institute’s business-climate index, based on a survey of 7,000 executives, climbed to 107.4 in February from 104.3 in January. That exceeded the median economist estimate in a Bloomberg survey of 104.9.
U.K. stocks briefly pared their advance as the European Commission forecast that the combined economy of the 17 nations in the euro area will contract in 2013. The commission predicted gross domestic product will shrink 0.3 percent. In November, it had projected growth of 0.1 percent.
The European Central Bank said financial institutions will repay 61.1 billion euros ($80 billion) of its three-year loans next week, half the amount that economists had forecast. The lenders will return the money on Feb. 27, which is their first opportunity to do so under the central bank’s second Longer Term Refinancing Operation.
CRH, the world’s second-biggest maker of construction materials, added 4.3 percent to 1,394 pence in London. A gauge of construction-related shares posted the biggest gain of the 19 industry groups on the Stoxx Europe 600 Index, gaining 2.2 percent. Balfour Beatty Plc, the U.K.’s largest housebuilder, advanced 1.9 percent to 282.8 pence.
Elan rose 32 cents to 7.97 euros. The drugmaker said it will buy back shares equivalent to 16 percent of its market value. Elan agreed on Feb. 6 to sell its stake in the Tysabri multiple-sclerosis drug to Biogen Idec Inc.
Antofagasta Plc, the metals producer owned by Chile’s Luksic family, climbed 1.6 percent to 1,084 pence. The stock was raised to outperform from underperform at RBC Capital Markets. Evraz Plc, the Russian steelmaker partly owned by Roman Abramovich, added 1.3 percent to 270.1 pence.
J Sainsbury Plc increased 2.1 percent to 345 pence, advancing for a third day. The U.K.’s third-largest supermarket group was raised to buy from neutral at Citigroup Inc. The brokerage said that the retailer will probably maintain its dividend yield of more than 4 percent.
BowLeven Plc surged 5.9 percent to 80.5 pence, a three-month high. The oil explorer said it found liquid hydrocarbons off the coast of Cameroon in West Africa.
G4S fell 0.9 percent to 287.1 pence, paring an earlier loss of as much as 4.9 percent. The world’s largest private-security business was downgraded to underweight, meaning investors should sell the shares, from neutral at HSBC. The brokerage said that the company’s margins have come under increasing pressure, especially in its domestic market.