Most U.K. Stocks Climb as U.S. Factory Data Offsets Fed

Most U.K. stocks rose, as a better-than-forecast U.S. manufacturing report offset Federal Reserve minutes signaling stimulus cuts will continue and preliminary data showing a Chinese purchasing managers’ index fell.

William Hill Plc added 3 percent after Exane BNP Paribas raised its rating on the bookmaker. BAE Systems Plc tumbled 8.3 percent after Europe’s largest defense company said earnings this year will fall as much as 10 percent. Rexam Plc lost 1.8 percent after saying underlying operating profit was little changed in 2013, and Jefferies Group LLC said it may cut its earnings forecast for the largest drinks-can maker.

The FTSE 100 Index added 16.28 points, or 0.2 percent, to 6,812.99 at the close of trading in London, after earlier losing as much as 1 percent. Fifty-seven stocks on the 101-member gauge fell, while 42 advanced. The benchmark has risen 2.2 percent this week as investors weighed minutes from the Bank of England’s latest meeting and companies including BHP Billiton Ltd. posted earnings. The FTSE All-Share Index also advanced 0.2 percent today, while Ireland’s ISEQ Index gained 0.2 percent.

U.K. equities erased declines today as a report showed the Markit Economics preliminary index of U.S. manufacturing increased to 56.7 in February, beating economists’ estimates, while Labor Department figures indicated fewer Americans filed applications for unemployment benefits last week.

The Conference Board’s index of U.S. leading indicators, a gauge of the outlook for the next three to six months, rose in January in line with estimates, and the Philadelphia Fed’s Business Outlook Survey for February unexpectedly declined.

Fed Minutes

Fed Policy makers said they would soon have to modify their year-old commitment to keep their benchmark interest rate near zero until unemployment falls below 6.5 percent, according to minutes of their January meeting released yesterday.

Several Fed officials also said that in the absence of any significant change to the economic outlook, there should be a presumption that the pace of monthly bond purchases will be reduced at each meeting, the minutes showed.

A Chinese manufacturing index fell to the lowest level in seven months, data showed today. The preliminary February reading of 48.3 for a purchasing managers’ index from HSBC Holdings Plc and Markit Economics came in lower than January’s final figure of 49.5 and the 49.5 median estimate in a Bloomberg News survey. A number below 50 indicates contraction.

William Hill added 3 percent to 356.2 pence. Exane BNP Paribas raised the bookmaker to outperform, similar to a buy rating, from neutral, saying the stock has fallen too far on investor concern that the U.K. government will impose curbs on gaming machines. Shares have fallen 12 percent this year.

Petrofac Gains

Petrofac Ltd. climbed 2.3 percent to 1,360 pence. The oil and gas engineer said that it got a $1.2 billion contract from BP Plc for a gas project in Oman.

Playtech Plc rallied 5.9 percent to 785 pence, the highest price since its initial public offering in March 2006. The software-developer for gaming companies said 2013 adjusted net income rose 26 percent to 148.3 million euros. Revenue rose 16 percent last year.

BAE tumbled 8.3 percent to 400.4 pence. Earnings per share will drop by 5 percent to 10 percent this year amid reduced defense spending in the U.S., BAE’s biggest market, the company said.

Rexam dropped 1.8 percent to 515 pence. The London-based company said underlying operating profit in 2013 was little changed at 449 million pounds ($747.4 million). Jefferies said it may adjust its earnings forecasts downwards because of foreign exchange fluctuations. The broker also said that Rexam would no longer be insulated from the decline in beverage-can demand in the U.S.

Fresnillo Falls

Fresnillo Plc retreated 0.7 percent to 985 pence, paring earlier losses of as much as 3.7 percent. RBC Capital Markets lowered its rating on the gold and silver miner to sector perform, similar to hold, from outperform, citing delays in getting an explosives permit for its sites in Mexico.

Vedanta Resources Plc slumped 5.7 percent to 858 pence, its biggest drop since November. HSBC Holdings Plc cut the India-focused metals and oil company to underweight, similar to a sell rating, from neutral, citing its constrained cash flow and weaker earnings from some of its divisions.

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