Bloomberg News

U.K. Stocks Little Changed, Erasing Earlier Losses; Miners Climb

June 13, 2013

U.K. stocks were little changed, recovering from the lowest level in almost two months, as shares of mining companies advanced and U.S. retail sales topped economists’ forecasts.

Eurasian Natural Resources Corp. Plc led a gauge of London-listed commodity producers higher after China abolished import licenses for iron ore. Royal Bank of Scotland Group Plc (RBS) fell 3.3 percent after saying Chief Executive Officer Stephen Hester will step down. Home Retail Group Plc dropped the most in 13 months after predicting subdued consumer spending this year.

The FTSE 100 Index rose 5.18 points, less than 0.1 percent, to 6,304.63 at the close of trading in London, recovering from an earlier slide of 1.5 percent. The gauge has lost 7.8 percent since Federal Reserve Chairman Ben S. Bernanke said May 22 that the central bank could pare stimulus if the U.S. labor market “improves in a real and sustainable way.” The broader FTSE All-Share Index fell less than 0.1 percent and Ireland’s ISEQ Index both slipped 0.2 percent.

“Markets pared losses after the strong U.S. retail sales and jobless claims data,” Stephane Ekolo, chief European strategist at Market Securities in London, wrote in an e-mail. “We may assume that there were some market participants who were waiting for a better entry point in to the market and when we reached those levels, they bought.”

U.S. retail sales in May rose more than forecast, data showed today. The 0.6 percent increase was the biggest in three months and followed a 0.1 percent gain in April, Commerce Department figures showed. The median forecast of 83 economists surveyed by Bloomberg called for a 0.4 percent advance. Data from a separate report indicated fewer Americans than forecast filed applications for unemployment benefits last week.

Commodity Producers

ENRC gained 3.2 percent to 240.7 pence. BHP Billiton Ltd. (BHP), the world’s largest mining company, added 1.8 percent to 1,793 pence. Rio Tinto Group, the second biggest, climbed 2.6 percent to 2,759.5 pence.

A gauge of commodity producers rose 1.8 percent, its biggest increase in three weeks. An industry official said China has scrapped the import-licensing system for iron ore. The decision will benefit small and medium-sized trading companies, said Wang Chunsheng, head of iron-ore trading at Shougang Group and a former vice-secretary general of the China Iron and Steel Association.

Vedanta Resources Plc gained 3.1 percent to 1,185 pence after Konkola Copper Mines, majority owned by the Indian metals producer, said it doesn’t owe tax payments to the Zambia Revenue Authority. The Zambia Daily Mail had earlier this month reported that KCM owed $26 million.

Evraz Plc, the largest Russian steelmaker by output, climbed 5.1 percent to 119.5 pence, its biggest gain since May 7.

Consort Medical Plc advanced 5 percent to 778 pence, for its biggest gain this year. The U.K. medical-device maker posted a full-year pretax profit of 19.6 million pounds ($31 million) and announced a dividend of 12.71 pence a share.

RBS CEO

RBS lost 3.3 percent to 315 pence after saying Hester will leave later this year as the state-controlled British bank prepares for privatization.

“The resignation of the RBS CEO ahead of the privatization was a surprise for the markets as he was well regarded and investors would have been keen to have him stay until the process of the privatization was well advanced,” Ekolo said.

Home Retail (HOME) plunged 9 percent to 131.1 pence, its largest drop since May 2012. The retailer’s Argos stores chain posted first-quarter sales that missed analysts’ estimates. Home Retail said it expects consumer spending to remain subdued this year and that full-year profit margins at its Homebase home-improvement chain will narrow by 0.5 percentage point.

Elan Corp., the Irish drug maker, fell 5.2 percent to 9.29 euros, the biggest drop in four months, after Royalty Pharma, an investor in intellectual-property revenue streams from pharmaceuticals, said it may be forced to end its bid to takeover the company.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

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


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