Bloomberg News

U.K. Stocks Rise for Second Day on Economy; Antofagasta Advances

June 14, 2011

June 14 (Bloomberg) -- U.K. stocks climbed for a second day after Chinese and U.S. economic data topped forecasts, easing concern the global recovery is faltering.

Antofagasta Plc and Kazakhmys Plc surged more than 3 percent as copper climbed. Royal Bank of Scotland Group Plc led banks higher as BofA Merrill Lynch Global Research recommended the industry. Avis Europe Plc soared 58 percent after agreeing to be bought by Avis Budget Group Inc.

The FTSE 100 Index rose 29.67, or 0.5 percent, to 5,803.13 at the 4:30 p.m. close in London, extending yesterday’s rebound from a 2 1/2-month low. The gauge has fallen for three straight weeks as U.S. jobs and manufacturing data trailed economist forecasts. The FTSE All-Share Index also gained 0.5 percent today, as did Ireland’s ISEQ Index.

“Appetite for buying does seem to be creeping back in,” said Ben Critchley, a sales trader at IG Index in London. “The prospect of a retracement on the FTSE back to the March lows is certainly fading.”

Reports today showed China’s industrial production rose more than estimated in May, gaining 13.3 percent from the year earlier and beating the median economist forecast of 13.1 percent. In the U.S., retail sales fell 0.2 percent in May, less than the 0.5 percent median forecast in a Bloomberg survey.

Miners, Banks

Mining companies advanced as copper rallied 2.7 percent on the London Metal Exchange. Kazakhmys jumped 3.8 percent to 1,282 pence, Antofagasta rose 3.5 percent to 1,257 pence and Vedanta Resources Plc climbed 1.1 percent to 2,015 pence.

Banks climbed as BofA Merrill Lynch said European lenders are trading at the cheapest level in 18 months. RBS, Britain’s biggest government-owned bank, rose 2.4 percent to 41.53 pence, Lloyds Banking Group Plc increased 1.9 percent to 48.55 pence while Barclays Plc gained 1.6 percent to 264.55 pence.

Schroders Plc rallied 3.9 percent to 1,586 pence after HBSC Holdings Plc raised its recommendation for Europe’s largest publicly traded fund-management company market value to “overweight” from “neutral.”

Avis Europe soared 58 percent to 310.7 pence after Avis Budget agreed to pay 636 million pounds ($1.04 billion) for the second-biggest car-rental company in Europe. Avis Budget will pay 315 pence per share, 60 percent higher than yesterday’s closing price of 196.6 pence.

ITV Plc, the U.K.’s biggest commercial broadcaster, climbed 4.4 percent to 68.2 pence, snapping a nine-day losing streak. Liberum Capital Ltd. reiterated its “buy” recommendation, saying the selloff was “overdone” and the company’s balance sheet enables it to return “significant levels of cash to shareholders.”

Southern Cross

Southern Cross Healthcare Plc surged 48 percent to 9 pence, the biggest gain since March. The U.K’s largest care home operator said its landlords agreed in principle to make “significant financial concessions” on rent.

Glencore International Plc dropped 4.5 percent to 500 pence, the biggest drop since its initial share sale last month, even as the world’s largest commodity trader reported a 47 percent increase in first-quarter profit. Nomura Holdings Inc. said the earnings were “disappointing.”

Separately, Glencore said it’s planning a $2.7 billion loan to replace debt backed by its stake in Xstrata Plc.

Eurasian Natural Resources Corp. fell 1.9 percent to 761.5 pence after Glencore said it isn’t planning a bid for the producer of metals in Kazakhstan.

--With assistance from Peter Levring in Copenhagen. Editor: Andrew Rummer

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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