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Bloomberg News

U.K. Stocks Advance as U.S. Manufacturing Data Tops Estimates

September 01, 2011

Sept. 1 (Bloomberg) -- U.K. stocks climbed for a third day, pushing the FTSE 100 Index to a four-week high, as U.S. manufacturing and jobs data topped forecasts.

Hargreaves Lansdown Plc, the U.K.’s biggest retail broker, surged 18 percent as customers and profit increased. Barclays Plc and Royal Bank of Scotland Group Plc rallied following a report that the U.K. will probably delay any overhaul of its lenders until at least 2015.

The FTSE 100 advanced 24.12, or 0.5 percent, to 5,418.65 at the 4:30 p.m. close in London. The gauge slumped 7.2 percent in August, its biggest monthly drop since February 2009, as concern that the global economic recovery is faltering wiped more than $300 billion off the value of U.K. shares. The FTSE All-Share Index added 0.2 percent today, while Ireland’s ISEQ Index rose 0.8 percent.

“The move into positive territory was largely due to some better-than-expected manufacturing data from the U.S. which helped lift stocks across the pond and this pulled the London market with it,” said Angus Campbell, the head of sales at Capital Spreads in London. “Even though the economic data released today is nothing to write home about and still shows manufacturing in a sorry state, it’s a relief for investors to see some light at the end of the tunnel.”

The Institute for Supply Management’s U.S. factory index fell to 50.6 in August from 50.9 in July, the Tempe, Arizona- based group said today. Economists had projected the gauge would drop to 48.5, according to the median forecast in a Bloomberg News survey. A reading of 50 is the dividing line between expansion and contraction in manufacturing.

U.S. Jobless Claims

A Labor Department report today showed U.S. initial jobless claims fell to 409,000 last week, compared with the 410,000 estimate in a Bloomberg survey of 46 economists’ estimates and down from a revised 421,000 the week before.

Hargreaves Lansdown jumped 18 percent to 508.5 pence, its biggest gain since May 2007. The broker reported a 50 percent increase in full-year net income to 91.8 million pounds ($149 million) and raised its dividend by 59 percent.

Barclays advanced 5.6 percent to 180.35 pence, RBS surged 8.2 percent to 26.25 pence and Lloyds Banking Group Plc jumped 6.2 percent to 35.67 pence. The U.K. government will probably delay any overhaul of banks until after the next general election, the Financial Times reported, citing unidentified government officials.

“Stricter regulation and banking reform has been a dark cloud that has been hanging over the major U.K. banks for much of the year, with investors fearing it may handicap banks from being able to report the size of profits that shareholders were used to before the financial crisis,” said Joshua Raymond, a market strategist at City Index Ltd. in London.

Charter, Hays

Charter International Plc rallied 4.7 percent to 799 pence. The welding and automation-equipment maker opened its books to Melrose Plc after the U.K. investment firm increased a possible takeover offer to 1.43 billion pounds.

Hays Plc, the U.K.’s biggest recruitment company, gained 6.7 percent to 80.55 pence. The company reported a 21 percent increase in sales in the year ended June 30 to 3.26 billion pounds, driven by growth in Asia. Net income grew eightfold to 80.1 million pounds, reflecting previous charges for back-office job cuts and a reduced price-fixing fine.

Xstrata Plc fell 2.5 percent to 1,052 pence. Fresnillo decreased Plc 3.7 percent to 2,022 pence.

Copper declined for the first time in seven days in London trading amid concern that China’s plan to tame inflation even as the economy slows may hurt demand for metals. Zinc and lead also fell.

--Editors: Will Hadfield, Andrew Rummer

To contact the reporter on this story: Adam Haigh in London at

To contact the editor responsible for this story: Andrew Rummer at

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