Bloomberg News

U.K. Stocks Rise For Fifth Day; Xstrata, Kingfisher Rise

November 23, 2012

U.K. stocks climbed for a fifth day, extending the benchmark FTSE 100 (UKX) Index’s biggest-weekly advance in almost a year, as business confidence rebounded in Europe’s two largest economies.

Xstrata Plc rose to a two-month high as the company finished its first production line at its Koniambo nickel project. Kingfisher Plc (KGF) gained 1.3 percent before next week’s sales update. Thomas Cook Group Plc rallied 4.4 percent as Investec reiterated its buy recommendation for the shares.

The FTSE 100 added 28.11 points, or 0.5 percent, to 5,819.14 at the close in London. The gauge has climbed 3.8 percent this week amid optimism U.S. policy makers will reach an agreement to avoid a budget deadlock and as a report signaled manufacturing expanded in China this month. The FTSE All-Share Index gained 0.5 percent today, while Ireland’s ISEQ Index increased 0.4 percent.

“Markets edged higher in afternoon trade, with encouraging German IFO survey and improving French business confidence data helping to lift spirits,” Ishaq Siddiqi, a market strategist at ETX Capital in London.

The volume of shares changing hands in the gauge’s companies was 39 percent lower than the 30-day average, according to data compiled by Bloomberg, as the U.S. market reopened from yesterday’s Thanksgiving holiday.

The German Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October, the first gain in eight months. The median economist forecast was for a drop to 99.5.

In France, sentiment among factory executives rose to 88 in November from the lowest level in more than three years, according to the national statistics office Insee. That followed a drop to 85 in October and beat the median economist forecast for a reading of 87.

Xstrata Rises

Xstrata (XTA), which this week had its $33 billion takeover by Glencore (GLEN) International Plc approved by shareholders and the European Union, climbed 0.6 percent to 1,020 pence, its highest level since September.

The company said construction of the first production line of the smelter at its Koniambo nickel project was complete. The first molten metal is expected before year-end, while the first metal may be tapped in January.

Glencore added 0.6 percent to 342.85 pence, extending its advance this week to 6.6 percent.

Kingfisher rose 1.3 percent to 280.7 pence before the U.K. owner of the B&Q home-improvement chain report’s third-quarter sales on Nov. 29.

Thomas Cook

Thomas Cook, which will report earnings on Nov. 28, rallied 4.4 percent to 24 pence, extending its gains this week to 20 percent. Investec raised its price estimate for the shares by 60 percent to 40 pence and reiterated its buy recommendation on the shares.

The short interest on Thomas Cook (TCG) stands at 8.9 percent of shares outstanding, according to Markit as of Nov. 21. That compares with an average of 1.5 percent for all companies on the FTSE All-Share Index and is the 10th highest on the gauge, the data show.

WM Morrison Supermarkets Plc (MRW) fell 0.7 percent to 261.7 pence. Nomura Holdings Inc. downgraded the European grocery industry to neutral from bullish, saying the region’s supermarkets haven’t been able to escape the effects of the global economic slowdown.

Sportingbet Plc (SBT), which is due to report sales on Nov. 30, dropped 3.7 percent to 46 pence. The company is the 9th most shorted stock on the All-Share Index, with 9.8 percent of the shares outstanding, according to Markit.

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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