Bloomberg News

U.K. Stocks Are Little Changed Before EU Ministers Meet

November 12, 2012

U.K. stocks were little changed near a six-week low as investors awaited the outcome of a euro area finance ministers’ meeting in Brussels on releasing more aid for Greece.

Lloyds Banking Group Plc (LLOY) and Barclays Plc (BARC) led a rebound in banks, both climbing more than 2 percent. Admiral Group Plc and InterContinental (IHG) Hotels Group Plc also advanced as analysts recommended the shares. Anglo American Plc lost 2.1 percent amid continued strikes at its platinum unit in South Africa.

The FTSE 100 retreated 2.41 points, or less than 0.1 percent, to 5,767.27 at the close of trading in London. The gauge lost 1.7 percent last week amid concern the next slice of aid for Greece from the European Union may be delayed and the U.S. is at risk of slipping back into a recession. The FTSE All- Share Index lost 0.1 percent today, while Ireland’s ISEQ Index fell 0.8 percent.

“November has seen stock indices fall in what is typically one of the best three months for markets,” Sandy Jadeja, chief technical analyst at City Index, wrote in a report. “There is a potential for a snap back rally if we see Friday’s high for the FTSE 100 (UKX) being cleared and sustained.”

The FTSE 100 swung between gains and losses before tonight’s meeting in Brussels where the euro-area’s finance ministers will look at ways to maintain Greek solvency. The volume of shares changing hands on the gauge’s companies was 11 percent lower than the 30-day average, according to data compiled by Bloomberg.

Greek Prime Minister Antonis Samaras won the vote on Greece’s 2013 budget early this morning. The nation’s fiscal plan, which forecasts a deficit of 5.2 percent of gross domestic product and a sixth year of contraction, is designed to regain the confidence of its euro-area and International Monetary Fund creditors.

Banks Gain

A gauge of U.K. banks shares climbed 1 percent, paring some of last week’s 3.7 percent selloff. Lloyds jumped 3.5 percent to 45.14 pence, Barclays increased 2.1 percent to 234.95 pence and Royal Bank of Scotland Group Plc (RBS) rose 1.6 percent to 274.5 pence.

Admiral Group added 3.6 percent to 1,092 pence after HSBC Holdings Plc today reiterated its overweight recommendation for the shares, meaning investors should own more than are represented in benchmark indexes.

“We expect 13 percent pa average earnings growth despite weaker U.K. vehicle growth during next three years,” wrote Dhruv Gahlaut in a note to clients dated today. “Positive commentary on claims from Admiral and other industry participants should support underwriting margins.”

InterContinental gained 1.4 percent to 1,579 pence after Exane BNP Paribas raised its recommendation for the world’s largest provider of hotel rooms to outperform, the equivalent of a buy rating, from neutral.

Miners Decline

Anglo American led mining companies lower, falling 2.1 percent to 1,827.5 pence. Anglo American Platinum Ltd., producer of about 40 percent of the metal, today said the cost of a two- month strike in South Africa has risen to about $263 million as it remains unable to resolve a pay dispute.

The Johannesburg-based company known as Amplats, which is about 79 percent-owned by Anglo American, said it’s lost 167,681 ounces of platinum output so far.

Xstrata, Glencore

Xstrata Plc (XTA) declined 1.5 percent to 956 pence after the Sunday Telegraph reported that some of Xstrata’s investors may vote against the companies’ $80 billion merger with Glencore International Plc (GLEN), even though Qatar Holding LCC, which owns a 12 percent stake, has backed the deal.

The newspaper reported that banks for both companies are trying to convince investors to support the merger and avoid the consequences of a complicated shareholder vote.

Glencore’s shares fell 0.9 percent to 336.25 pence.

BG Group Plc (BG/) lost 1.6 percent to 1,040.5 pence after the Sunday Times reported that the company’s chief financial officer, Fabio Barbosa, won’t return from medical leave, without citing anyone. BG has “quietly” begun to search for a successor, according to the newspaper.

G4S Plc (GFS) dropped 1.9 percent to 248.7 pence after Morgan Stanley lowered its recommendation for the security company to equalweight from overweight, meaning investors’ holdings should match what is represented in benchmark indexes.

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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