U.K. Stocks Rise to Seven-Week High; LSE Rallies on SalesNamitha Jagadeesh
U.K. stocks rose to the highest level in seven weeks, led by London Stock Exchange Group Plc and WPP Plc, as a report showed U.S. jobless-benefit claims fell to a two-month low.
LSE rallied to a five-year high after saying first-quarter revenue rose 39 percent. WPP, the world’s biggest advertising company, climbed 3.6 percent after French peer Publicis Groupe SA reported first-half sales that exceeded estimates. Tate & Lyle Plc fell 0.9 percent after Societe Generale SA lowered its rating on the shares.
The FTSE 100 Index added 62.43 points, or 1 percent, to 6,634.36 at the close in London, the highest level since May 30. The gauge has still lost 3 percent since May 22 after the Federal Reserve signaled it may start to taper stimulus measures if the U.S. economy improves in line with its forecasts. The FTSE All-Share Index rose 0.9 percent today, while Ireland’s ISEQ Index jumped 1.7 percent.
“What counts today is the earnings,” said Pierre Mouton, who helps oversee $6 billion as a portfolio manager at Notz, Stucki & Cie. in Geneva. “I would look in detail at what companies say about their businesses. We will probably see positive earnings in most cases, though I also think companies will deliver a slightly cautious message for the end of the year. The U.K. economy is also starting to recover slowly and that is a positive for stocks.”
The volume of shares in FTSE 100 companies changing hands today was 6.1 percent less than the 30-day average, data compiled by Bloomberg show.
In the U.S., jobless claims dropped by 24,000 to 334,000 in the week ended July 13, the fewest since early May, a Labor Department report showed. Economists on average had forecast a reading of 345,000. A separate release showed manufacturing in the Philadelphia region expanded more than forecast in July.
LSE climbed 7.4 percent to 1,590 pence, the highest price since February 2008. The operator of Europe’s oldest independent bourse said first-quarter revenue rose 39 percent to 249.7 million pounds ($380 million) as all of its business divisions grew and LCH contributed to the performance. The so-called organic revenue increased 8 percent on constant-currency basis.
Peter Lenardos, an analyst at RBC Capital Markets in London, wrote in a note that LSE’s sales matched the upper end of consensus estimates.
WPP rose 3.6 percent to 1,210 pence. Publicis, the third-biggest advertising company, reported first-half revenue of 3.35 billion euros, surpassing the 3.31 billion-euro average analyst estimate.
EasyJet Plc advanced 4.2 percent to 1,406 pence, its highest price since it sold shares to the public in November
2000. Ryanair Holdings Plc gained 2.9 percent to 7.28 euros in Dublin. JPMorgan Chase & Co. raised its recommendations on Europe’s two biggest discount airlines to overweight, the equivalent of buy, from underweight.
“Our multi-year vision of Europe envisions little restructuring actually standing in the way of voracious growth appetites at higher caliber discounters,” the brokerage wrote in a report.
Marks & Spencer Group Plc, Britain’s largest clothing retailer, advanced 1.9 percent to 482.4 pence as U.K. retail sales rose for a second month in June. Sales including fuel climbed 0.2 percent from May, when they surged 2.1 percent, the Office for National Statistics said.
J Sainsbury Plc, the U.K.’s third-largest supermarket chain, increased 3 percent to 391.1 pence.
Sports Direct International Plc jumped 6.2 percent to 638 pence, the highest price since the company first sold shares in
2007. The sporting-goods retailer posted full-year underlying earnings before interest, taxes, depreciation and amortization of 287.9 million pounds, beating the 268 million-pound average estimate of analysts surveyed by Bloomberg.
Tate & Lyle declined 0.9 percent to 851.5 pence after Societe Generale downgraded the maker of low-calorie sweetener Splenda to hold from buy, citing the likelihood of weaker earnings from its bulk-ingredient business.