Bloomberg News

U.K. Stocks Advance as Mining Companies Rebound

September 20, 2011

(Corrects to remove reference to Burberry being upgraded in first and final paragraphs.)

Sept. 20 (Bloomberg) -- U.K. stocks climbed, erasing earlier losses, as mining companies rebounded and analysts recommended BAE Systems Plc.

Kazakhmys Plc and Fresnillo Plc both climbed more than 1 percent in London trading. Shares of BAE and Burberry Group Plc rallied more than 2 percent.

The benchmark FTSE 100 Index gained 32, or 0.6 percent, to 5,291.56 at 9:25 a.m. in London, paring yesterday’s 2 percent selloff. The FTSE All-Share Index also gained 0.6 percent today, while Ireland’s ISEQ Index increased 0.5 percent.

“Financial markets are acting fairly robustly across most asset classes despite the increasingly negative newsflow,” said Manoj Ladwa, a senior trader at ETX Capital in London. “Equities have moved into the black, having started the day in negative territory, as investors opt for stocks with more defensive qualities.”

The FTSE 100 fell as much as 0.8 percent in the first hour of trading after Italy had its credit rating cut to A from A+ by Standard & Poor’s which cited weakening economic growth and a “fragile” government.

Kazakhmys led a rebound in mining shares, rising 1.4 percent to 990.5 pence. Fresnillo increased 1.8 percent to 1,901 pence and Lonmin Plc gained 1 percent to 1,178 pence.

A gauge of European mining shares dropped 4 percent yesterday as base metals fell amid speculation that Greece may not receive an aid payment that would help it avoid default.

BAE increased 2.3 percent to 286.4 pence after Societe Generale SA raised its recommendation for the defense company to “buy” from “hold.”

Burberry rallied 3 percent to 1,493 pence.

--Editor: Will Hadfield

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

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


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