U.K. Stocks Rise Second Day Before U.S. Industry Report
U.K. stocks advanced for a second day, trimming a weekly loss, as investors awaited a report on U.S. industrial production.
Royal Dutch Shell Plc (RDSA) and Tullow Oil Plc (TLW) rose at least 1 percent each, tracking gains in European oil-and-gas stocks. Talvivaara Mining Co. tumbled 42 percent as the nickel miner said it will apply for corporate reorganization and file for bankruptcy if that fails.
The FTSE 100 Index gained 28.76 points, or 0.4 percent, to 6,694.89 at 10:57 a.m. in London. The benchmark has slipped 0.2 percent this week as the Bank of England said unemployment may reach its threshold to consider interest-rate increases sooner than forecast. The broader FTSE All-Share Index (ASX) also added 0.4 percent today, while Ireland’s ISEQ Index was little changed.
“Stocks are being helped by the direction of the global economy and by the resilience of policy makers,” said John Haynes, head of research at Investec Wealth & Investment in London. “There’s no way policy makers will taper stimulus measures too fast. If they do so, it will be because of a strong recovery. The U.K. and the U.S. have led the recovery, so they may lag the next phase of market appreciation.”
In the U.S., a Federal Reserve report at 9:15 a.m. in Washington may show industrial production grew at a slower pace in October amid a partial government shutdown that lasted 16 days. Another release at 8:30 a.m. local time may show manufacturing in the New York region expanded at a faster pace in November from a month earlier.
Shell, Europe’s biggest oil company, gained 1.6 percent to 2,084.5 pence. Tullow Oil, the U.K. driller focused on Africa and Latin America, advanced 1.2 percent to 896 pence. Oil and gas stocks were among the best-performing industry groups in the Stoxx Europe 600 Index, the regional benchmark.
Capital & Counties Properties Plc (CAPC) gained 1.7 percent to 329.7 pence after obtaining formal planning consent for the redevelopment of the Earls Court Exhibition Centre in London.
Talvivaara plummeted 42 percent to 3.55 pence, its biggest drop and lowest price since its London listing in 2007. The Finnish company and its subsidiary Talvivaara Sotkamo Ltd. will each apply for corporate reorganization after failing to secure funds for a voluntary restructuring, according to a statement. Talvivaara said it will file for bankruptcy if the new plan also fails.
Talvivaara withdrew its 2013 output forecast in July and posted a bigger-than-estimated third-quarter loss as nickel prices dropped and the company struggled to ramp up production because of excess water in its open-pit mine.
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