U.K. Stocks Rise, Paring Weekly Loss as Rolls-Royce GainsSofia Horta e Costa
U.K. stocks advanced, after three days of declines this week dragged stock valuations down from their highest multiples since the end of 2009.
Rolls-Royce Holdings Plc rose 2.2 percent on a report that Airbus Group NV may use the company’s engines in a new version of its A330 aircraft. Imagination Technologies Group Plc slumped 5.8 percent after Intel Capital Corp. sold a stake in the designer of chip technology. Reed Elsevier Plc slipped as Barclays Plc downgraded its rating on the stock.
The FTSE 100 Index added 22.65 points, or 0.3 percent, to 6,757.77 at the close of trading in London, paring its weekly loss to 1 percent. The broader FTSE All-Share Index rose 0.3 percent today, and Ireland’s ISEQ Index added 0.1 percent.
The U.K. equity gauge is trading at 14.2 times the projected earnings of its members, just 0.8 percent below its highest valuation in more than five years reached on June 20. The number of shares trading hands today in FTSE 100-listed stocks was 16 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
A final reading from the Office for National Statistics in London confirmed U.K. gross domestic product rose 0.8 percent in the first three months of 2014 from the prior quarter, matching economists’ forecasts. Growth is projected to accelerate to 3 percent this year, from 1.7 percent in 2013.
U.S. data showed that American consumer confidence rose in June, following a preliminary report that signaled a drop. The Thomson Reuters/University of Michigan index of sentiment came in at 82.5, compared with the earlier estimate of 81.2 and a reading of 81.9 in May.
Rolls-Royce rose 2.2 percent to 1,069 pence. Airbus will probably chose the British company as the only supplier of engines for its upgraded jet, Reuters reported, citing people it didn’t identify. General Electric Co. is the main alternative supplier for the A330, according to Reuters.
Imagination Technologies dropped 5.8 percent to 211.7 pence. Intel Capital, which was the company’s largest publicly-disclosed shareholder before the sale, reduced its stake to about 5 percent after selling 25 million shares at 205 pence ($3.49) apiece, according to a statement today.
Reed Elsevier declined 0.7 percent to 935.5 pence after Barclays cut its rating on the stock to equal weight, similar to neutral, from the equivalent of a buy recommendation. The brokerage said Reed’s growth potential is fully priced into the shares, which had doubled since a low in June 2012.