U.K. Stocks Rally to Highest Since May on Growth OutlookJonathan Morgan
U.K. stocks advanced for a fourth day, with the benchmark FTSE 100 Index rallying to its highest level since May 22, after the World Bank increased its global-growth forecast.
Burberry Group Plc, the country’s biggest luxury-goods maker, jumped the most in six months after reporting quarterly revenue that exceeded estimates. Anglo American Plc gained 5.5 percent after UBS AG advised investors to buy the shares. Hargreaves Lansdown Plc dropped 4.1 percent after saying it needs 3.5 billion pounds ($5.7 billion) of new assets over three years to compensate for a change in its prices.
The FTSE 100 Index rose 53 points, or 0.8 percent, to 6,819.86 at the close. The gauge has rallied 1.9 percent in the last four days as the U.S unemployment rate fell and a banking-supervision group eased capital rules for lenders. The broader FTSE All-Share Index climbed 0.7 percent today, while Ireland’s ISEQ Index added 0.6 percent.
“The ability to see globally that long-term growth is getting back to the long-term average is good.” Justin Urquhart Stewart, who helps oversee $6.8 billion at Seven Investment Management Ltd. in London, said. “Markets have been trying to look for the next area of either weakness or confidence and when in doubt, they will look for the nervous areas.”
The World Bank raised its global-growth forecasts, predicting the economy will expand 3.2 percent this year. That is higher than its June projection of 3 percent. The Washington-based lender raised the estimate for growth in the richest nations to 2.2 percent from 2 percent. Part of the increase reflects improvement in the 18-country euro area, and the U.S. expanding twice as fast as Japan.
In the U.S., a report showed that manufacturing in the New York region grew more than expected this month. The Federal Reserve Bank of New York’s general economic index rose to 12.51 in January, up from a revised 2.22 the previous month. That beat the median forecast of 53 economists in a Bloomberg News survey which called for an increase to 3.50.
Separately, the Fed releases its Beige Book business survey, which contains anecdotal reports on the economy from its 12 districts. The central bank, which next gathers Jan. 28-29, is beginning to trim monthly bond purchases, citing an improvement in the labor market.
Burberry jumped 4.6 percent to 1,537 pence. The company said retail revenue advanced 14 percent to 528 million pounds ($866 million) in the three months ended Dec. 31. Analysts had predicted 518 million pounds, according to the median estimate in a Bloomberg survey.
Anglo American rose 5.5 percent to 1,332.5 pence, its biggest increase since Aug. 9. UBS upgraded the stock to buy from neutral, citing a recent losses and a dividend yield of 4.1 percent. Anglo American slumped 25 percent since Sept. 19 through Jan. 9.
Standard Life Plc climbed 2.3 percent to 385.9 pence, a five-month high. Credit Suisse Group AG upgraded the shares to outperform, the equivalent of buy, from neutral. The brokerage cited prospects for sustained profit growth, supported by a consistent increase in the company’s assets under management.
Hargreaves Lansdown retreated 4.1 percent to 1,446 pence, its largest decrease since Oct. 29. The U.K.’s biggest retail broker changed its pricing structure. The new tariff represents 8 million pounds of investment in lower client charges in the first 12 months of operation alone, hurting revenue.
Centrica Plc and SSE Plc declined 3.5 percent to 315.5 pence and 2.2 percent to 1,320 pence, respectively. Barclays Plc downgraded both stocks to underweight, citing an uncertain outlook for U.K. energy supply and the threat of shrinking profit margins.
EasyJet Plc lost 0.6 percent to 1,685 pence as J&E Davy Holdings Ltd. downgraded the shares to underperform, similar to sell, from neutral. The brokerage said the stock price already reflects the airline’s performance for 2014.
Petropavlovsk Plc fell 4.3 percent to 72.75 pence as Canaccord Genuity Group Inc. cut its rating to hold from buy.