Bloomberg News

U.K. Stocks Advance as German Business Confidence Climbs

March 26, 2012

U.K. stocks rose the most in almost two weeks after a report by the Ifo institute showed that German business confidence unexpectedly climbed in March.

Aberdeen Asset Management Plc (ADN) gained 4.4 percent after funds increased in the first two months of this year. EasyJet Plc surged 7.5 percent after forecasting a narrower loss for the six months through the end of March. ICAP Plc (IAP) fell 2.1 percent after HSBC Holdings Plc downgraded the shares.

The FTSE 100 Index (UKX) advanced 47.81, or 0.8 percent, to 5,902.7 at the close in London, the largest gain since March 13. The broader FTSE All-Share Index climbed 0.9 percent today, while Ireland’s ISEQ Index increased 0.4 percent.

“We’re seeing a relatively good start to the week,” said Angus Campbell, head of sales at Capital Spreads in London. “We’ve seen some good Ifo numbers from Germany, which does rub off on the U.K. market.”

A report today showed that Germany’s business confidence climbed to an eight-month high in March, signaling that Europe’s largest economy will return to growth.

The Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 109.8 this month. That beat the median economist forecast in a Bloomberg News survey for a reading of 109.6.

The FTSE 100 has added 5.9 percent this year as the European Central Bank provided 1 trillion euros ($1.3 trillion) of loans to the region’s lenders and reports showed that the U.S. economic recovery is strengthening. The number of shares changing hands on the index was 19 percent lower than the 30-day average, according to data compiled by Bloomberg.

U.S. Monetary Policy

Federal Reserve Chairman Ben S. Bernanke said that while he’s encouraged by the U.S. jobless rate’s decline to 8.3 percent, continued accommodative monetary policy will be needed to make further progress.

The drop in unemployment may reflect “a reversal of the unusually large layoffs that occurred” in 2008 and 2009, and this process may now be over, Bernanke said in a speech today. Reducing the jobless rate further will probably require a quicker expansion of business production and consumer demand, which “can be supported by continued accommodative policies,” he said.

The U.S. index of pending house sales fell 0.5 percent to 96.5 in February after a 2 percent increase a month earlier, the National Association of Realtors said. The gauge was forecast to rise 1 percent, according to the median estimate of economists in a Bloomberg survey.

Aberdeen, EasyJet Advance

Aberdeen Asset Management climbed 4.4 percent to 260.80 pence, the largest increase since Feb. 1. Funds under management increased 6 percent to 184.4 billion pounds ($293 billion) at the end of February from 173.9 billion pounds at the end of December, as clients added money to its equity funds.

EasyJet (EZJ) jumped 7.5 percent to 495.80 pence, its largest rally in two months, after predicting a narrower six-month loss as business bookings helped offset rising fuel costs.

Europe’s second-biggest discount carrier forecast a pretax loss in the six months through March 31 of 100 million pounds to 120 million pounds, compared with a loss of 153 million pounds in the same period last year. EasyJet had predicted a loss of 140 million pounds to 160 million pounds.

Tullow Oil Plc (TLW) advanced 6.6 percent to 1,570 pence after reporting Kenya’s first oil discovery that has been described as a “major breakthrough” by the country’s president.

Diageo Plc (DGE) gained 2 percent to 1,539.5 pence after ING Groep NV increased its share-price estimate to 1,520 pence from 1,329 pence.

Ophir Energy Plc surged 19 percent to 477.6 pence after the company said its Jodari-1 well in Tanzania found gas, in the “largest discovery” in Ophir’s history.

ICAP lost 2.1 percent to 408.9 pence after HSBC downgraded the world’s largest broker of transactions between banks to underweight, the equivalent of sell, from neutral.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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


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