U.K. Stocks Rise on Central-Bank Stimulus OptimismNamitha Jagadeesh
U.K. stocks rose, following a record streak of monthly gains for the FTSE 100 Index, amid optimism central banks will continue to stimulate the global economy.
Standard Chartered Plc and Barclays Plc paced gains among London-listed lenders, each rising at least 1 percent. Kofax Plc increased 1.6 percent after posting third-quarter earnings that surged 77 percent. Home Retail Group Plc tumbled 7 percent after reporting a drop in full-year profit.
The FTSE 100 advanced 21.17 points, or 0.3 percent, to 6,451.29 at the close in London. The benchmark has rallied for the past 11 months, for the longest stretch of gains since its beginning in 1984. The broader FTSE All-Share Index added 0.4 percent today, while Ireland’s ISEQ Index rose 0.3 percent.
“It’s very important that the monetary stimulus stays in place,” Adrian van Tiggelen, chief equity strategist at ING Investment Management in The Hague, told Francine Lacqua on Bloomberg Television. “We suppose that it will happen. Interest rates are getting so low because of all the monetary stimulus that equities, especially defensive equities, are becoming a kind of safe-haven bond proxy.”
All western European markets except the U.K., Ireland and Denmark are closed today for Labor Day. The number of shares changing hands in companies on the FTSE 100 was 42 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
The Federal Open Market Committee releases its latest interest-rate decision and policy statement at 2 p.m. in Washington following a two-day meeting. Economists in a Bloomberg News survey forecast that the central bank will not change the pace of its monthly bond-purchase program.
The European Central Bank will cut its benchmark interest rate to a record low of 0.5 percent tomorrow, according to a majority of projections in another survey.
In the U.S., an ADP Research Institute report showed that private payrolls increased by 119,000 in April, compared with a gain of 158,000 in March. Economists in a Bloomberg survey had projected an increase of 150,000.
Separate data showed the Institute for Supply Management’s factory index dropped to 50.7 last month from the previous month’s 51.3. That still beat economists’ average estimate of
50.5 in a Bloomberg survey. A reading of 50 is the dividing line between expansion and contraction.
Standard Chartered rose 1.6 percent to 1,642 pence. A gauge of London-listed lenders added 0.7 percent.
Barclays climbed 1.3 percent to 288.7 pence. The British lender yesterday named Jonathan Beebe head of equities for Europe, Middle East and Africa at its investment bank.
Kofax added 1.6 percent to 325 pence as the scanning-technology provider said third-quarter revenue rose 21 percent to $26.4 million. Earnings before interest, taxes, depreciation and amortization, excluding some items, jumped 77 percent to $8.4 million, according to a statement.
ITM Power Plc climbed 6.5 percent to 48.88 pence after the British energy storage and clean-fuel company said it sold products for the first time in Hungary and South America. The Hydrogen and Fuel Cell Fair in Hanover, Germany last month generated a “large pipeline of leads which have been followed up,” the company said in a statement.
Oxford Biomedica Plc jumped 21 percent to 2 pence, the biggest rally in more than a year, after saying it signed an agreement with Novartis AG to make clinical-grade material using its LentiVector gene-delivery technology.
Home Retail Group plunged 7 percent to 144.9 pence after the owner of the Argos catalog chain said so-called benchmark pretax profit fell 10 percent to 91 million pounds ($141 million) in the year ended March 2.
“Our view of the 2013/14 financial year is that it will remain similar to 2012/13, with consumer spending continuing to be impacted by ongoing inflationary pressures and low levels of consumer confidence,” the company said in a statement.
Kazakhmys Plc dropped 3.5 percent to 334.3 pence, while Lonmin Plc fell 2 percent 263.6 pence. A gauge of mining companies lost 0.4 percent, reversing earlier gains of as much as 1.8 percent.