U.K. Stocks Advance for Second Day; BG Group Rallies

U.K. stocks gained for a second day as BG Group Plc reported production that beat estimates and a gauge of mining shares rallied after the European Central Bank lowered its benchmark interest rate.

BG Group Plc climbed 4.3 percent after posting better-than-estimated production data. Glencore International Plc jumped 5.4 percent as it completed its takeover of Xstrata Plc. Imagination Technologies Group Plc tumbled the most in 11 years after saying that delays in closing deals hurt full-year pretax profit. Shire Plc fell 6.7 percent after first-quarter sales missed projections and the company cut its sales forecast.

The FTSE 100 Index rose 9.42 points, or 0.2 percent, to 6,460.71 at the close in London. The benchmark has rallied for the past 11 months, the longest stretch of gains since its beginning in 1984. The broader FTSE All-Share Index was little changed today, while Ireland’s ISEQ Index added 0.6 percent.

“ECB president Mario Draghi has wrought the necessary magic to keep the FTSE 100 from slipping lower this afternoon, as the expected rate cut was delivered today,” said Yusuf Heusen, a trader at IG in London. “Only time will tell whether the optimism generated by expectations of an easing-in policy will last.”

The number of shares changing hands in companies on the FTSE 100 was 11 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.

Rate Cut

ECB policy makers meeting in Bratislava today lowered the main refinancing rate to 0.50 percent from 0.75 percent, a move predicted by 45 of 70 economists in a Bloomberg News survey. The ECB kept the deposit rate at zero and reduced the marginal lending rate to 1 percent from 1.5 percent.

“We will look at all the incoming data and we will monitor all incoming developments,” ECB President Mario Draghi said at a press conference following the rate-cut announcement. “We stand ready to act if needed.”

BG Group Plc climbed 4.3 percent to 1,136 pence after the U.K.’s third-largest oil and gas producer reported first-quarter production and liquefied natural gas earnings that beat analysts’ estimates.

Glencore International Plc advanced 5.4 percent to 331.15 pence. Glencore Xstrata Plc, formed after the world’s largest publicly-traded commodity producer completed its $29 billion takeover of Xstrata, will begin trading at 8 a.m. in London tomorrow and in Hong Kong on May 6.

A gauge of mining shares in the FTSE 350 rallied 1.1 percent. Antofagasta Plc added 2 percent to 912.5 pence and Polymetal International Plc advanced 3.5 percent to 704 pence.

Imagination Tumbles

Imagination plunged 26 percent to 315.4 pence. The U.K. designer of chip technology for phones and tablets said its adjusted pretax profit for the year through April 30, 2013 would be below analysts’ estimates because of delays in closing licensing deals. The company said it will publish the results on June 19.

Shire dropped 6.7 percent to 1,885 pence, its biggest decline since June. The world’s largest maker of attention-deficit drugs, reduced its revenue forecast for the year. Shire said it expects sales to grow by mid-to-high single digit percentage, compared with an earlier forecast of low double-digits. Sales in the first quarter were $1.16 billion, missing the average analyst estimate of $1.21 billion.

BT Group Plc slid 2.3 percent to 279.1 pence after a report that British regulator Ofcom will investigate the company at the request of TalkTalk Telecom Group Plc founder Charles Dunston. He and TalkTalk chief Dido Harding allege that BT is reclaiming a monopoly in the market by building a new network of fiber cables, the Telegraph reported, citing an Ofcom announcement.

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