U.K. Stocks Climb; FTSE 100 Rebounds From 2 1/2-Week LowNamitha Jagadeesh
U.K. stocks advanced, with the FTSE 100 Index rebounding from its lowest level in 2 1/2 weeks, as shares of banks and mining companies rallied.
Rio Tinto Group and Glencore Xstrata Plc each advanced more than 1.5 percent. Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc led a gauge of lenders higher. John Wood Group Plc climbed 1.9 percent as Morgan Stanley raised its recommendation on the oil-services company. Tesco Plc lost 1.5 percent as JPMorgan Chase & Co. downgraded the shares.
The FTSE 100 added 29.82 points, or 0.5 percent, to 6,656.99 at the close in London, extending its gain this month to 3.5 percent. The equity benchmark declined yesterday to the lowest level since May 10 amid concern the Federal Reserve may scale back its monetary stimulus. The broader FTSE All-Share Index advanced 0.4 percent today, while Ireland’s ISEQ Index increased 0.2 percent.
“We’re seeing a slight recovery today after the weak development yesterday,” said Espen Furnes, who helps oversee $75 billion as a fund manager at Storebrand Asset Management in Oslo. “There’s been a bit more volatility in the markets in the last week, which signals a more cautious tone among investors. We’re in an increased profit-taking mode.”
The U.S. Commerce Department said in a report today that the world’s biggest economy grew at a revised 2.4 percent annualized rate in the first quarter, compared with an earlier reading of 2.5 percent. The median estimate of economists surveyed by Bloomberg had projected growth of 2.5 percent.
A report from the National Association of Realtors showed that pending house sales increased 0.3 percent in the U.S. in April, a slower pace than in March. The median economist forecast had called for sales to rise 1.5 percent.
The volume of shares changing hands in companies listed on the FTSE 100 was 12 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
A gauge of mining shares in the FTSE 350 Index advanced 1.8 percent. Rio Tinto, the world’s second-biggest raw-materials company, gained 2.5 percent to 2,933 pence, while Glencore added 1.7 percent to 333.4 pence.
Lloyds, the U.K.’s largest mortgage lender, climbed 1.9 percent to 61.8 pence, while RBS increased 1.7 percent to 331.5 pence. HSBC Holdings Plc, the biggest bank in Europe, added 1.1 percent to 735.9 pence. A gauge of banks in the FTSE 350 increased 1.2 percent.
Wood Group advanced 1.9 percent to 849 pence as Morgan Stanley raised its rating on the shares to overweight, the equivalent of buy, from equal weight. The brokerage named it a top pick among European oil-service companies.
“We believe Wood Group is the best positioned in the sector to withstand a lower growth outlook for industry spending,” analysts led by Robert Pulleyn wrote in a note.
Tesco slid 1.5 percent to 367.3 pence after JPMorgan lowered its recommendation on the U.K.’s biggest retailer to neutral from overweight. The brokerage said it has a cautious view on Britain’s food retailers.
Wm Morrison Supermarkets Plc, the fourth-largest supermarket chain, lost 1 percent to 275.3 pence.
Tate & Lyle Plc dropped 1.5 percent to 836.5 pence, its lowest price in six weeks, as the maker of the artificial sweetener Splenda reported full-year sales of 3.26 billion pounds ($5 billion). That missed the average analyst forecast of 3.28 billion pounds.