U.K. stocks closed little changed as a rally in Hargreaves Lansdown Plc and Rolls-Royce Holdings Plc (RR/) offset worse-than-expected U.S. economic reports.
Hargreaves, Britain’s largest retail broker, jumped 5.6 percent after posting an 11 percent increase in assets under management. Rolls-Royce, the world’s second-biggest aircraft- engine maker, rose to its highest since at least 1988. Cable & Wireless Worldwide Plc (CW/) tumbled 8.2 percent after India’s Tata Communications Ltd. decided against making an offer for the U.K. network operator.
The FTSE 100 Index (UKX) lost less than 0.1 percent to 5,744.55 in London. The benchmark gauge has still lost 3.7 percent from its 2012 high on March 16 amid mounting concern that euro-area policy makers have yet to contain the sovereign-debt crisis. The FTSE All-Share Index (ASX) was little changed today, while Ireland’s ISEQ Index dropped 0.4 percent.
“Economic data does look like it is showing some stabilization but it is not the case around the world,” said Samantha Fitzpatrick, senior investment manager at Aberdeen Asset Management Plc in Glasgow. “Expectations are now getting higher, and that just means that there is room for further disappointments down the line. We are still very much focused on protecting our clients’ capital rather than trying to chase markets as they rise up.”
U.S. Jobless Claims
A U.S. Labor Department report showed jobless claims fell to 386,000 in the week ended April 14 from a revised 388,000 the prior period. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000.
A separate report show sales of previously owned houses unexpectedly fell in March. Purchases dropped 2.6 percent to a 4.48 million annual rate from 4.6 million in February. missing the average forecast of an increase to 4.61 million.
Spain and France raised 10.54 billion euros ($13.85 billion) in debt in this morning’s auctions, meeting their maximum plans. The FTSE 100 pared earlier gains, in line with retreats elsewhere in Europe, as bond yields in France, Italy and Spain jumped.
A report this week showed U.K. inflation unexpectedly accelerated for the first time in six months in March, spurring speculation the Bank of England will pause its stimulus program next month.
“Today’s good bond auctions from both Spain and France have somehow helped markets stop yesterday’s bleeding,” said Stephane Ekolo, London-based chief European strategist at Market Securities. “But we need more good news in order to see markets participants take more risk.”
Hargreaves Lansdown (HL/) climbed 5.6 percent to 508.5 pence, the most since November. The company said its assets under management rose 2.6 billion pounds ($4.2 billion) to 26 billion pounds in the three months to March 31. Fiscal third-quarter revenue increased 17 percent from a year earlier to 62.1 million pounds amid fund inflows and recovering markets.
Rolls-Royce Holdings Plc rose 3.8 percent to 844 pence, its highest price since at least September 1988. Saab AB, a Swedish maker of equipment for the defense industry, reported first- quarter earnings that beat estimates.
Morgan Stanley today reiterated its outperform, or buy, recommendation on Rolls-Royce before the world’s second-largest aircraft-engine maker reports results on May 4.
IMI Target Price
IMI Plc (IMI) advanced 1.5 percent to 974 pence. The stock was raised to buy from hold at Jefferies. Analyst Andrew Douglas wrote in a report that the shares may climb to 1,150 pence in the next 12 months.
“IMI is a curate’s egg of a stock in some respects,” Douglas wrote. “It seldom fires on all cylinders and is by no means a high growth business.” However, returns “are high and the shares are good value.”
GlaxoSmithKline Plc (GSK) rose 0.9 percent to 1,454 pence. The drugmaker offered about $2.59 billion to buy Human Genome Sciences Inc., its U.S. partner on the lupus treatment Benlysta. Human Genome rejected the bid.
Cable & Wireless Worldwide tumbled 8.2 percent to 34 pence. Tata Communications said yesterday it failed to agree on a price so it won’t bid for the U.K. network operator.
Man Group Plc (EMG), the world’s largest publicly traded hedge fund manager, dropped 6.2 percent to 93.4 pence, the lowest since November 2000. The stock fell 7.4 percent yesterday as assets at the firm’s flagship AHL Diversified fund slipped last week.
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