U.K. Stocks Advance as Economy Avoids Third RecessionSofia Horta e Costa
U.K. stocks climbed, with the FTSE 100 Index extending its highest level in three weeks, as a report showed Britain avoided a triple-dip recession.
Vodafone Group Plc climbed to an 11-year high after a report that Verizon Communications Inc. may offer $100 billion to take control of Verizon Wireless. Unilever lost 3 percent after the world’s second-largest consumer-goods company posted the slowest quarterly revenue growth in two years. AstraZeneca Plc slid 1.9 percent as first-quarter sales missed estimates.
The FTSE 100 added 10.83 points, or 0.2 percent, to 6,442.59 at the close in London, after gaining as much as 0.6 percent and losing as much as 0.3 percent. The gauge yesterday completed its biggest two-day rally since Jan. 3 as companies reported sales that beat estimates and commodity producers rose. The broader FTSE All-Share Index advanced 0.3 percent today, while Ireland’s ISEQ Index lost 0.1 percent.
“There’s still no end to the debate on the primary cause of the slow growth in the U.K.,” said Tom Elliott, global market strategist at JPMorgan Asset Management in London, which oversees $1.5 trillion globally. “Is it austerity or is it weak growth in the euro zone? I saw Unilever reporting very weak growth largely because of Europe, so there’s undoubtedly an element there.”
Britain’s gross domestic product grew 0.3 percent in the first quarter, according to a report from the Office for National Statistics. That beat the 0.1 percent median estimate of economists in a Bloomberg survey. The economy avoided entering its third recession since 2008 by rebounding from a contraction of 0.3 percent in the final three months of 2012. Economists define a recession as two successive quarters of shrinking output.
“I don’t think we should be ‘hurrahing’ too much,” Elliott said. “These numbers can be revised all over the place. When estimates are based on a subjective view of the effect of weather, you have to treat them with a pinch of salt.”
In the U.S., applications for jobless benefits decreased by 16,000 to 339,000 in the week ended April 20, the lowest number in six weeks, according to a Labor Department report. Economists had predicted 350,000 claims, according to the median estimate in a Bloomberg survey.
Vodafone, the second-biggest stock on the FTSE 100, advanced 1.7 percent to 196.4 pence, its highest price since January 2002. New York-based Verizon has hired advisers to prepare a possible $100 billion cash-and-stock bid for Vodafone’s 45 percent stake in Verizon Wireless, Reuters said, citing two people it didn’t identify. Brenda Raney, a spokeswoman for Verizon Wireless, declined to comment to Bloomberg News.
British American Tobacco Plc gained 1.2 percent to 3,591 pence. The maker of Pall Mall and Dunhill cigarettes said first-quarter sales excluding currency shifts rose 5 percent, exceeding the 3.7 percent average estimate of analysts surveyed by Bloomberg.
A gauge of London-listed commodity producers rose for a third day. Randgold Resources Ltd. and Lonmin Plc, which both operate mines in Africa, rallied 5.4 percent to 5,315 pence and 6.4 percent to 291.2 pence, respectively. U.K. mining stocks have still fallen 13 percent this year.
Ocado Group Plc, the online grocer that sells products from Waitrose Ltd., surged 12 percent to 168.1 pence, its biggest advance in six weeks. Ocado may soon sign a deal to become the online distributor for Wm Morrison Supermarkets Plc, the Financial Times reported, citing unidentified sources.
Unilever lost 3 percent to 2,760 pence. Sales excluding acquisitions, disposals and currency fluctuations, rose 4.9 percent from a year earlier, the maker of Dove soap said. The average estimate of 12 analysts surveyed by Bloomberg had called for a gain of 5.5 percent.
AstraZeneca dropped 1.9 percent to 3,325.5 pence, its biggest decline in two months. The U.K.’s second-largest pharmaceutical company said quarterly revenue fell 13 percent to $6.39 billion, missing the $6.55 billion average analyst prediction.