U.K. Stocks Advance, Posting Biggest Rally Since JulyCorinne Gretler
U.K. stocks rose, posting their biggest increase in eight months, as Russian president Vladimir Putin said he saw no immediate need to invade Ukraine and U.S. Secretary of State John Kerry arrived in Kiev as part of Western powers’ efforts to express support.
Glencore Xstrata Plc gained 1.7 percent after reporting a 20 percent increase in full-year net income and raising its estimate for cost savings. Ashtead Group Plc jumped to its highest price in at least 24 years after predicting that full-year profit will exceed its expectations. Fresnillo Plc fell 4.7 percent, the biggest slump since December, after 2013 earnings missed analysts’ projections.
The FTSE 100 Index advanced 115.42 points, or 1.7 percent, to 6,823.77 at the close of trading in London for its biggest rally since July 4. The gauge lost 1.5 percent yesterday as concern grew that a disruption of business and trade in eastern Europe will hurt corporate earnings. The broader FTSE All-Share Index climbed 1.8 percent today, while Ireland’s ISEQ Index added 0.4 percent.
“Investors are still in the buy-the-dip mentality, which seems to be justified from the old adage that political markets have short legs,” said Benedict Goette, chief executive officer of Compass Capital AG in Zurich, which manages about $790 million. “However, equity markets are vulnerable to negative surprises.”
Putin ended military exercises in western Russia today and ordered Russian troops back to base, according to the Kremlin. U.S. Secretary of State John Kerry arrived in Kiev to offer an aid package to the interim cabinet. Both the U.S. and Europe which have decried Russian military activity in Crimea.
U.S. President Barack Obama’s administration is preparing $1 billion in loan guarantees for cash-strapped Ukraine, while the International Monetary Fund sent a delegation to Kiev to discuss financial support. Russia has halted an aid package that it had agreed with the former president, Viktor Yanukovych.
The predominantly Russian-speaking Crimea last week became the flashpoint in a violent conflict raging since November that led to the departure of Yanukovych and the formation of an interim government led by pro-European Union leaders.
Glencore, which completed its $29 billion takeover of Xstrata Plc last year, rose 1.7 percent to 331.9 pence. Adjusted net income last year rose to $3.67 billion from $3.06 billion, the company said. Glencore also said the Xstrata deal will generate cost savings of as much as $2.4 billion this year, compared with the $2 billion it had projected earlier.
Ashtead Group rallied 13 percent to 956 pence, its highest price since at least 1989, according to data compiled by Bloomberg. The equipment-rental company forecast full-year profit to be better than previously projected as the business momentum remains strong.
Meggitt Plc climbed 2.3 percent to 506.5 pence after posting a 1 percent increase in operating profit last year. Analysts from Liberum Capital Ltd. and Jefferies & Co. said the results were in line with their projections.
Fresnillo declined 4.7 percent to 924.5 pence. The gold and silver miner reported a 58 percent drop in 2013 profit to $278.2 million, excluding the effect of asset revaluation under its Silverstream agreement with Mexico’s Industries Penoles SAB. That trailed the $318.4 million analysts had estimated.