U.K. Stocks Advance as Report Confirms Growth Accelerated

Updated on

U.K. stocks climbed, with the FTSE 100 Index gaining for the second time in three days, as a report confirmed that Britain’s economy expanded at a faster pace in the third quarter.

Royal Mail Group Ltd. rallied 6 percent after the postal service, which listed shares last month, said first-half earnings almost doubled. Compass Group Plc climbed 1.3 percent to 938.5 pence, the highest price since the business was spun out of Granada Compass Plc in February 2001. Amec Plc dropped 2.8 percent for the biggest decline on the index.

The FTSE 100 climbed 13.25 points, or 0.2 percent, to 6,649.47 at the close in London as two stocks rose for every one that fell. The gauge has rallied 13 percent this year, heading for its biggest annual increase since 2009, as central banks around the world pledged to keep interest rates low to support economic recovery. The FTSE All-Share Index added 0.3 percent today, while Ireland’s ISEQ Index gained 0.6 percent.

“The economic numbers have come in line and given the closeness to the Thanksgiving holiday it is not going to significantly impact market direction because of pretty quiet markets,” said James Knightley, a senior economist at ING Bank NV in London. “The U.K. numbers are broadly consistent with a strengthening economy.”

The number of shares changing hands in companies listed on the FTSE 100 was 7.5 percent lower than the average of the past 30 days, data compiled by Bloomberg showed. U.S. equity markets will close tomorrow for the Thanksgiving holiday.

U.K. Economy

The Office for National Statistics reported that the U.K.’s economy grew 0.8 percent in the third quarter, matching its initial estimate. Business investment rose 1.4 percent, while exports dropped 2.4 percent.

In the U.S., a Commerce Department release showed that durable-goods orders fell 2 percent in October and rose a revised 4.1 percent in September. The median forecast in a Bloomberg survey had called for a 2 percent decline last month.

The final November reading of the Thomson Reuters/University of Michigan consumer-sentiment index was 75.1, more than the median economist forecast of 73.1 and the preliminary reading for the month of 72.

Royal Mail jumped 6 percent to 565 pence. Operating profit after some costs rose to 283 million pounds ($460 million) in the six months ended Sept. 29 from 144 million pounds a year earlier. Sales climbed 3.8 percent to 4.52 billion pounds. Parcels accounted for 51 percent of group revenue.

Compass Group

Compass increased 1.3 percent to 938.5 pence. The world’s biggest catering company predicted margins will improve this year. Compass also reported full-year adjusted pretax profit of 1.19 billion pounds, beating the average analyst estimate of 1.15 billion pounds, and said it would buy back shares.

Rio Tinto Group added 0.9 percent to 3,139 pence as a gauge of mining shares posted the biggest increase among 19 industry groups in the Stoxx Europe 600 Index. Vedanta Resources Plc gained 1 percent to 875 pence.

Amec dropped 2.8 percent to 1,124 pence as UBS AG said the oil-engineering company may have to issue equity to pay for the takeover of Foster Wheeler AG. UBS’s comments followed a report in The Times that said the company has appointed Goldman Sachs Group Inc. to advise on a possible deal.