U.K. Stocks Rise for Third Day, Head for Weekly GainJonathan Morgan
U.K. stocks advanced for a third day, heading for their first weekly gain in more than a month, as a rebound in U.S. consumer spending and a drop in jobless claims added to evidence the economy is strengthening.
Randgold Resources Ltd. and Vedanta Resources Plc followed a gauge of London-listed mining companies higher. Greene King Plc climbed 2.8 percent after reporting full-year pretax profit in line with analysts’ estimates.
The FTSE 100 rose 77.92 points, or 1.3 percent, to 6,243.4 at the close of trading in London, heading for a 2.1 percent increase this week. The gauge has still declined 5.2 percent so far in June after the Federal Reserve signaled it may end bond buying next year if the U.S. economy improves in line with forecasts. The measure has lost 2.6 percent so far this quarter. The FTSE All-Share Index added 1.3 percent today, while Ireland’s ISEQ Index gained 1.1 percent.
“The FTSE 100 is slightly up today courtesy of commodity stocks,” Stephane Ekolo, a strategist at Kyte Group in London, wrote in an e-mail. “An encouraging macroeconomic picture means we are likely to experience a bounce in the market. Again, developments in the U.S. will undoubtedly set the tone.”
Consumer spending in the U.S. rebounded in May in line with forecasts, a report showed today. Household purchases, which account for about 70 percent of the economy, rose 0.3 percent last month after a 0.3 percent decline in the previous month, Commerce Department figures showed. Another release showed fewer Americans filed claims for unemployment benefits last week.
More Americans signed contracts in May to buy previously owned homes than at any time in more than six years, a sign of bigger progress in the industry.
In the European Union, finance chiefs struck an agreement on how to handle failing banks. In seven hours of emergency negotiations in Brussels that concluded at about 1:30 a.m. today, ministers finalized guidelines for assigning losses to private creditors and regulating public assistance.
Randgold Resources, a producer of gold in West Africa, gained 1.6 percent to 4,036 pence. Vedanta, the metals and oil producer controlled by billionaire Anil Agarwal, advanced 0.5 percent to 1,033 pence. BHP Billiton Ltd., the world’s largest mining company, added 1.3 percent to 1,694.5 pence. A gauge of mining companies listed on the FTSE 350 Index rose 1.2 percent.
Greene King, the U.K. brewer of Abbot ale, climbed 2.8 percent to 767 pence after reporting full-year pretax profit of 162 million pounds ($248 million), exceeding estimates of 161 million pounds.
ICAP Plc gained 1.2 percent to 357.9 pence, erasing an earlier decline of 3 percent. The world’s largest broker of transactions between banks has lost 2.6 percent so far in June after rising 28 percent in May.