U.K. Stocks Are Little Changed After Ten-Day RallySofia Horta e Costa
U.K. stocks were little changed, after the benchmark FTSE 100 Index yesterday rallied to its highest level since October 2007 and completed its longest streak of gains in almost four years.
Aviva Plc rose the most since August after reporting an 18 percent increase in the value of new business. Thomas Cook Group Plc jumped to a two-year high after saying it plans to raise 1.6 billion pounds ($2.4 billion) to restructure its borrowings. National Grid Plc fell the most in a month after the owner of Britain’s power-distribution network said U.S. storms cut operating profit by about 136 million pounds.
The FTSE 100 Index lost 5.75 points, or 0.1 percent, to 6,687.8 at the close in London. The equity benchmark completed its longest streak of gains since July 2009 yesterday, and has surged 13 percent this year as central banks maintained stimulus measures. The broader FTSE All-Share Index was little changed today, while Ireland’s ISEQ Index declined 0.4 percent.
“As long as the stimulus keeps coming, then you’ve got to be in there,” Lucy Macdonald, chief investment officer for equities at Allianz Global Investors in London, told Francine Lacqua on Bloomberg Television. “Although there’s certainly a bubbly feeling occurring, when you look at the absolute valuations against history, they’re not wildly out of line.”
The volume of shares changing hands in FTSE 100 companies was 14 percent higher than the average of the past 30 days, data compiled by Bloomberg show.
In the U.S., new-home beginnings fell to a five-month low in April. Housing starts slumped 16.5 percent, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March, the Commerce Department reported today in Washington. The median estimate of 81 economists surveyed by Bloomberg was for a 970,000 rate.
More Americans than projected filed applications for jobless benefits last week. Unemployment claims jumped by 32,000 to 360,000 in the week ended May 11, exceeding all forecasts in a Bloomberg survey of economists and the most since the end of March, Labor Department figures showed today in Washington.
Aviva rose 7.2 percent to 346.5 pence. The value of new business rose to 191 million pounds in the first quarter, from 162 million pounds a year earlier, the insurer said.
Lloyds Banking Group Plc gained 2.6 percent to 60.91 pence, its highest price in more than two years. The lender will return to profitability this year, allowing the U.K. state to begin selling its 39 percent stake in the bank, Chief Executive Officer Antonio Horta-Osorio said today.
Thomas Cook Group Plc jumped 13 percent to 164.1 pence. The tour operator, which required an emergency loan 18 months ago, said the plan will reduce the proportion of debt on its balance sheet and extend the maturity of existing arrangements, while also paving the way for dividend payments to resume.
Travis Perkins Plc advanced 4.1 percent to 1,543 pence, its highest price since June 2007, even as it said first quarter sales slipped 1.2 percent from the previous year. The builders merchant will be added in the MSCI United Kingdom Index after equity markets close on May 31.
Homebuilder Persimmon Plc and William Hill Plc, the operator of more than 2,370 betting shops, rose 5.1 percent to 1,206 pence and 2.6 percent to 447 pence, respectively. MSCI Inc. also added the two companies to its United Kingdom index.
National Grid lost 1.1 percent to 835 pence. U.S. storms including Hurricane Sandy cut operating profit by about 136 million pounds, the company said. That compares to an initial November forecast of as much as 100 million pounds, before the February snow storm known as Nemo.
3i Group Plc fell 4.8 percent to 345.8 pence, its biggest decline since October 2011, paring a year-to-date rally of almost 60 percent. The U.K.’s largest publicly traded private-equity firm said the net value of its assets increased 11.5 percent in the 12 months ending in March.
Synthomer Plc slid 7.6 percent to 208 pence after the maker of nitrile latex said demand in Europe was weaker in March and April than forecast, and it remains “cautious” about the outlook for the year.