Stocks Rise; FTSE 100 Trims Second Week of Declines

U.K. stocks advanced, paring a second straight week of declines for the FTSE 100 Index, as a rally in shares of precious-metals producers and homebuilders outweighed a drop in travel and leisure companies.

Fresnillo Plc and Randgold Resources Ltd. gained more than 4 percent as gold and silver climbed. Persimmon Plc followed shares of U.K. homebuilders higher. Ryanair Holdings Plc fell 1.5 percent, pacing a drop in European travel stocks.

The benchmark FTSE 100 gained 16.65 points, or 0.3 percent, to 6,499.99 at the close in London. The gauge has still lost 1.3 percent this week, the biggest drop since June, as speculation grew that the Federal Reserve will reduce the pace of bond buying as the economy improves. The broader FTSE All-Share Index added 0.4 percent today, while Ireland’s ISEQ Index retreated 0.4 percent.

“We continue to believe we are in a bull market for developed equity, which we would define as one that makes a series of higher highs and higher lows,” Mark Tinker, who manages the $430 million Axa Framlington Global Opportunities fund, wrote in a report. “U.K. and European markets are rewarding stock picking.”

The volume of shares changing hands in FTSE 100-listed companies was 2.9 percent lower than the 30-day average, data compiled by Bloomberg show.

Housing Starts

A U.S. government report showed new-home construction advanced in July. Housing starts climbed to an 896,000 annualized rate, from a revised 846,000 pace in June. Economists surveyed by Bloomberg had forecast an increase to 900,000. Building permits, which signal construction activity, rose to a 943,000 rate from 918,000.

Fresnillo, the world’s largest primary silver producer, surged 4.2 percent to 1,172 pence, the highest price since May. Randgold, a producer of the precious metal in Africa, jumped 5.3 percent to 5,150 pence and Petropavlovsk Plc, a producer of gold in Russia, soared 22 percent to 119.5 pence.

Gold rose 0.2 percent to the highest price in almost two months at 11:55 a.m. in New York and silver climbed 1.2 percent, extending its rally from a June 27 low to 26 percent.

A gauge of miners in the FTSE 350 Index advanced 1.5 percent. Glencore Xstrata Plc added 2.2 percent to 308.35 pence and Anglo American Plc climbed 3.5 percent to 1,547.5 pence.

Persimmon, the U.K.’s largest homebuilder by market value, jumped 8.3 percent to 1,188 pence, snapping five days of declines. Taylor Wimpey Plc advanced 6.5 percent to 108.3 pence and Barratt Developments Plc added 3.9 percent to 312.9 pence.

Interest Rates

The companies have all still retreated more than 3 percent this week amid concern interest rates will rise earlier than previously forecast and damage demand for houses.

Ryanair, Europe’s biggest discount airline, fell 1.5 percent to 6.64 euros in Dublin. TUI Travel Plc declined 0.9 percent to 359.4 pence. A gauge of travel and leisure companies was the worst-performing industry group in the Stoxx Europe 600 Index today as violence in Egypt continued.

Anite Plc plummeted 6.9 percent to 117 pence, the biggest drop in five months, as the software supplier for the wireless and travel industries said trading in the first fiscal quarter ended Aug. 15 has been restrained.