U.K. Stocks Rise, Snapping Six-Day Losing StreakCorinne Gretler
U.K. stocks rose for the first time in seven days, snapping the longest stretch of losses since November 2011, as data showed house prices surged to a record and U.S. industrial production rose more than forecast.
Persimmon Plc led developers, rallying 3.7 percent. Vodafone Group Plc climbed 1.7 percent after the world’s second-biggest wireless carrier agreed to buy Spanish cable operator Grupo Corporativo Ono SA. Tesco Plc declined 1.3 percent after Bank of America Corp. recommended selling the U.K.’s largest retailer’s shares.
The FTSE 100 Index added 40.46 points, or 0.6 percent, to 6,568.35 at the close of trading in London. The benchmark gauge declined 2.8 percent last week, the biggest slump since June, as concern grew that a potential partition of Ukraine will intensify tensions between the U.S. and Russia. The broader FTSE All-Share Index gained 0.7 percent today, while Ireland’s ISEQ Index rose 1.1 percent.
“The U.K. recovery relies heavily on real-estate investments,” said Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen. “So any renewed flow into equities will naturally favor this sector. The calm and relief mode we’re seeing today may be rather short-lived though, as the geopolitical risks are far from cleared.”
In the U.S., a report showed that industrial production increased 0.6 percent in February, following a drop of 0.2 percent the previous month. That beat the 0.2 percent gain economists had forecast in a Bloomberg News survey.
Shares of builders rose as a Rightmove Plc report showed asking prices for homes in London surged to a record in March. Prices in the British capital climbed 2.1 percent from February to 552,530 pounds ($920,000), taking the annual appreciation to more than 11 percent, the data showed. Nationally, values rose 1.6 percent to 255,962 pounds, also an all-time high.
Persimmon advanced 3.7 percent to 1,361 pence. Bovis Homes Group Plc gained 4.7 percent to 895 pence. Taylor Wimpey Plc added 2.1 percent to 118.2 pence. Chancellor of the Exchequer George Osborne said yesterday he will extend a government mortgage-assistance plan called Help to Buy to 2020.
Vodafone rose 1.7 percent to 226 pence. The purchase of Ono gives Vodafone 1.9 million customers in Spain. The deal will generate savings of about 2 billion euros and potential revenue addition of 1 billion euros, the company said.
Anglo American Plc gained 2.7 percent to 1,461.5 pence and Glencore Xstrata Plc increased 3.2 percent to 306.6 pence.
Tesco lost 1.3 percent to 299.7 pence. Bank of America cut the stock to underperform, or sell, from neutral. saying the company’s profit margin might fall because of an upcoming price war. Bank of America cited a statement from Wm Morrison Supermarkets Plc that it will invest 1 billion pounds in cutting prices.
The volume of shares changing hands in FTSE 100-listed companies was 16 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.