Bloomberg News

U.K. Stocks Climb, Led by Commodity Producers; EasyJet Advances

January 26, 2012

Jan. 26 (Bloomberg) -- U.K. stocks rebounded from two days of losses as Federal Reserve Chairman Ben S. Bernanke signaled the U.S. central bank will keep interest rates low through 2014 and said a third round of asset purchases remains an option.

Rio Tinto Group and Randgold Resources Ltd. led commodity producers higher as metals prices advanced and Petropavlovsk Plc increased it gold-production forecast. EasyJet Plc rallied 10 percent after reporting that revenue increased.

The benchmark FTSE 100 Index gained 72.2, or 1.3 percent, to 5,795.2 at the close in London. The FTSE-All Share Index increased 1.3 percent as did Ireland’s ISEQ Index. The FTSE 100 has risen 4 percent this year amid signs that the U.S. economy is recovering and after the European Central Bank lent money to banks at 1 percent using its three-year long-term refinancing operation.

“Whilst growth has been better than expected in the U.S., Bernanke’s press conference highlighted the willingness and ability of the Federal Reserve to provide more stimuli,” said Gerard Lane, an equity strategist at Shore Capital in Liverpool, England. “We would suggest risk assets are supported by better- than-expected U.S. economic data and the ECB’s willingness for balance-sheet expansion to stave off the sovereign-debt crises.”

Fed Support

U.S. policy makers are “prepared to provide further monetary accommodation if employment is not making sufficient progress towards our assessment of its maximum level, or if inflation shows signs of moving further below its mandate- consistent rate,” Bernanke said yesterday after a Federal Open Market Committee meeting in Washington. Bond buying is “an option that’s certainly on the table,” he added.

The Fed yesterday also extended its prediction to keep interest rates low through at least late 2014, in its first forecast for U.S. rates.

Representatives of Greece’s private creditors will propose that bonds issued as part of a debt exchange should carry a weighted average coupon of 3.75 percent, Kathimerini reported, without saying how it got the information.

Charles Dallara, the managing director of the Washington- based Institute of International Finance, will make the proposal when talks with Greek officials resume in Athens today, the newspaper said.

Rio Tinto advanced 4.9 percent to 3,893 pence and Fresnillo Plc climbed 4.3 percent to 1,817 pence. Kazakhmys Plc surged 7.3 percent to 1,194 pence.

Petropavlovsk Gains

Petropavlovsk, a miner of gold in Russia, advanced 11 percent to 772 pence, its biggest gain since October 2009. Chairman Peter Hambro said sales reached $1 billion and the company forecast further growth in production this year.

Randgold, a producer of the precious metal in Africa, added 5.1 percent to 7,170 pence.

EasyJet surged 10 percent to 445.5 pence, its biggest jump since July. Revenue rose 17 percent to 763 million pounds ($1.2 billion) in the quarter ended Dec. 31, offsetting fuel-bill increases and curbing a predicted first-half loss.

Sirius Minerals Plc slumped 9.6 percent to 21.25 pence as it proposed selling shares to raise 50 million pounds.

--Editors: Will Hadfield, Andrew Rummer

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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


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