Bloomberg News

U.K. Stocks Advance Before G-20 Summit; Randgold, Fresnillo Gain

November 02, 2011

Nov. 2 (Bloomberg) -- U.K. stocks rose, rebounding from the biggest three-day drop since September, before leaders from the Group of 20 meet in France to tackle Europe’s debt crisis.

Randgold Resources Ltd. led a rebound in commodity producers, climbing 7.7 percent after the company forecast higher gold production. Xstrata Plc and Antofagasta Plc both rallied more than 4 percent as base metals advanced. Next Plc jumped 6.5 percent after the retailer reported faster sales growth.

The benchmark FTSE 100 Index jumped 62.53, or 1.2 percent, to 5,484.1 at the close in London, after earlier falling as much as 0.7 percent. The FTSE All-Share Index rose 1.1 percent, while Ireland’s ISEQ Index gained less than 0.1 percent.

“So often in the past we’ve seen markets rally ahead of important meetings,” said Angus Campbell, head of sales at Capital Spreads in London. “Today is a classic example of optimistic buying ahead of a major meeting of global leaders.”

The FTSE 100 had tumbled 5.1 percent over the previous three days as investors awaited details of how euro-area leaders will fund the expansion of the region’s rescue fund to 1 trillion euros ($1.4 trillion) and as Greek Prime Minister George Papandreou called a referendum on the latest bailout.

Policy makers held emergency talks today on the eve of the G-20 summit in Cannes, France, and may tell Papandreou there is no alternative to budget cuts imposed in the bailout plan hammered out last week.

Fed Assessment

Stocks also rallied before the release of the U.S. Federal Reserve’s statement on the economy and monetary policy at the close of European trading.

The central bank raised its assessment of the world’s largest economy though it refrained from taking any additional steps to ease monetary policy to drive growth. Economists said before the release that policy makers would probably be engineering a third round of large-scale asset purchases.

Randgold rallied 7.4 percent to 7,235 pence after the company forecast a 22 percent increase in gold production next year as output in Mali and Ivory Coast rises. The metal producer more than quadrupled net income in the third quarter to $106.8 million.

The shares also advanced as gold gained for the first time in four sessions in New York with European debt concerns spurring demand for the metal as a protection of wealth.

Fresnillo Plc, which produces silver and gold, jumped 7.7 percent to 1,783 pence.

Antofagasta, Next

Antofagasta, which today reported a 17 percent jump in third-quarter copper output, rallied 5.4 percent to 1,174 pence and Xstrata advanced 4.1 percent to 1,016 pence. BHP Billiton Ltd., the world’s largest mining company, advanced 1.9 percent to 1,952 pence.

Next rallied 6.5 percent to 2,723 pence. The U.K.’s second- largest clothing retailer reported faster sales growth in the third quarter as the expansion of its home-shopping unit outweighed worsening sales at company stores.

Total brand sales rose 3.3 percent, excluding value-added tax, more than the first half’s 3.2 percent gain and beating the median analyst estimate of 1.4 percent. Directory revenue increased 17 percent after a 15 percent gain in the first half.

ARM Holdings Plc rose 2.6 percent to 587 pence after Hewlett-Packard Co., the world’s largest computer maker, demonstrated servers using the U.K. company’s technology, departing from its longstanding use of Intel Corp. chips.

Lloyds Banking Group Plc paced declining shares, falling 4.4 percent to 29.21 pence after the lender said Chief Executive Officer Antonio Horta-Osorio will take a medical leave of absence. He is expected to return before the end of the year.

--Editors: Srinivasan Sivabalan, 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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