Bloomberg News

U.K. Stocks Rise for First Time in Five Days; BP Rallies

June 27, 2012

U.K. stocks climbed for the first time in five days after better-than-estimated U.S. data helped ease concern about the strength of the global economy before tomorrow’s European Union summit.

BG Group Plc (BG/) and BP Plc climbed with crude oil, while CRH Plc (CRH) and Wolseley Plc (WOS) led construction-industry shares higher. Standard Chartered Plc (STAN) rallied 3.1 percent as Britain’s second- largest bank by market value reiterated its forecast.

The FTSE 100 Index (UKX) rose 76.96, or 1.4 percent, to 5,523.92 at the close in London, the biggest gain since June 19. The gauge had lost 3.1 percent over the previous four days amid concern this week’s summit in Brussels won’t produce decisive measures to contain Europe’s debt crisis. The FTSE All-Share Index and Ireland’s ISEQ Index each increased 1.3 percent today.

“Durable goods and pending home sales data both enjoyed positive reads,” said Will Hedden, a sales trader at IG Index in London. “Generally, the mood is a little more positive today despite the pending EU summit.”

German Chancellor Angela Merkel and French President Francois Hollande meet today in Paris before the summit in Brussels. Merkel faces an increasingly united bloc of euro-area nations demanding more drastic measures to fight the debt crisis and preserve the currency union.

Rajoy Measures

Spanish Prime Minister Mariano Rajoy said he will urge other European leaders to take measures to “stabilize markets using the available instruments.”

“Investors are not expecting a miracle” from the EU meeting, Andrew Milligan, head of global strategy at Standard Life Investments, wrote in a report. “The best that might be hoped for is a series of good decisions that begin to steer the euro zone away from crisis.”

Stocks extended gains today after U.S. data showed more people than forecast signed contracts to purchase previously owned homes and orders for durable goods climbed more than projected.

BG Group led energy companies higher as oil rose as much as 2 percent to $80.92 a barrel in New York. BG rallied 3.8 percent to 1,256 pence, BP advanced 1.7 percent to 408.5 pence and Royal Dutch Shell Group Plc, Europe’s largest oil company, added 1.4 percent to 2,106 pence.

CRH, the world’s second-biggest building-materials maker, advanced 4.2 percent to 1,132 pence in London and Wolseley, the largest supplier of heating and plumbing products, jumped 3.7 percent to 2,294 pence. Both companies generate more than 40 percent of their revenue in the Americas.

Standard Chartered led a rebound in banks, climbing 3.1 percent to 1,375 pence as the lender reiterated its forecast for profit in 2012.

Standard Chartered

The bank is “comfortable” with estimates for 2012 pretax profit of $7.46 billion, Finance Director Richard Meddings said on a conference call with analysts today. That’s a 10 percent increase on the $6.78 billion year-earlier figure.

Barclays Plc (BARC) and Royal Bank of Scotland Group Plc (RBS) also rebounded from four days of losses. The shares advanced 1.9 percent to 196.05 pence and 2.4 percent to 233.1 pence, respectively.

Lloyds Banking Group Plc gained 3.5 percent to 31.16 pence after the Financial Times reported the lender may sell 630 branches to Co-Operative Group Ltd. as early as today.

Man Group Plc (EMG) climbed 1.3 percent to 72.9 pence, rebounding from a two-day selloff. The world’s largest publicly traded hedge fund manager said the net asset value of its Man AHL Diversified fund increased 1.1 percent last week, boosted by “bearish positioning” in commodities and stocks.

Northgate Gains

Northgate Plc (NTG), a provider of leased vans in Spain and the U.K., surged 17 percent to 209 pence, the largest gain in almost three years. The company reported an increase in pretax profit and said it will pay its first dividend since 2009.

Glencore International Plc fell 1.5 percent to 298.3 pence after Qatar Holding LLC demanded the company’s 16.9 billion- pound ($26.4 billion) bid for the rest of Xstrata Plc (XTA) be increased by 16 percent.

Qatar, which built an 11 percent stake in Xstrata since February at a cost of about $4.3 billion, wants the agreed offer raised to 3.25 Glencore shares for each of Xstrata’s, compared with the existing offer of 2.8 terms. Xstrata shares gained 1.4 percent to 796.6 pence.

Evraz Plc (EVR), the steelmaker part-owned by Russian billionaire Roman Abramovich, sank 2.9 percent to 248.9 pence after German rival Salzgitter AG said it can no longer forecast that its steel division will break even this year.

Yule Catto & Co. (YULC) sank 22 percent to 138 pence, the largest drop since at least 1989, after the maker of specialty chemicals said demand in North America and Europe has deteriorated.

Safestore Holdings Plc (SAFE), the U.K.’s largest self-storage operator, plunged 9.7 percent to 102 pence after reporting a first-half net loss. That was the biggest drop since August.

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


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus