BS: U.K. Stocks Little Changed as FTSE 100 Heads for Weekly Advance
U.K. stocks were little changed, with the benchmark FTSE 100 (UKX) Index heading for its first weekly gain in a month, as mining companies rallied and investors watched the expiry of derivative contracts.
Polymetal International Plc led commodity producers higher, as gold climbed. Meggitt Plc (MGGT) increased after UBS AG recommended that investors buy shares in the aircraft-parts maker. Burberry Group Plc fell 2.5 percent after Bank of America Corp. downgraded the U.K.’s largest luxury-goods maker to the equivalent of a hold rating.
The FTSE 100 advanced less than 0.1 percent to 6,545.53 at 1:14 p.m. in London. The gauge is poised for a weekly increase of 0.3 percent amid growing optimism tit-for-tat sanctions between the U.S. and Russia won’t lead to wider trade and business disruption. The broader FTSE All-Share Index was also little changed, while Ireland’s ISEQ Index climbed 0.3 percent. Trading may be more volatile as futures and options contracts expire in a process known as witching.
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“In the last year to 18 months, we’ve had incredible amounts of potentially derailing news to overcome, and every single time, the markets have come through,” Toby Morris, a London-based sales trader at CMC Markets Plc, said by telephone. “A lot of people are looking over their shoulder for the potential of a far more drastic sell-off than we’ve seen. Because every time it doesn’t materialize, we move higher.”
Consumer Sentiment
A report at 4 p.m. in Brussels may show consumer confidence in the euro area improved this month. An advance reading may show the European Commission’s index of household confidence increased in March to minus 12.3 from minus 12.7 in February, according to the median of estimates compiled by Bloomberg.
Polymetal International added 2.1 percent to 627 pence and Fresnillo Plc climbed 1.7 percent to 881.5 pence as gold snapped a four-day decline.
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Anglo American Plc rose 1.4 percent to 1,430.5 pence as a gauge of London-listed mining companies rallied for a second day. Copper futures rebounded on the London Metal Exchange, trimming a fourth weekly decline. Vedanta Resources Plc gained 1.1 percent to 841 pence.
Meggitt advanced 0.8 percent to 473.4 pence. UBS raised its rating on the company to buy from neutral, saying the stock offers good value after recent declines. Meggitt slumped 11 percent this year through yesterday.
Burberry, RBS
Burberry (BRBY) fell 2.5 percent to 1,385 pence, retreating for the fourth straight day. Bank of America cut the U.K.’s largest luxury-goods maker to neutral from buy, saying currency moves may reduce earnings before interest and taxes by as much as 50 million pounds in 2015.
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Royal Bank of Scotland Group Plc dropped 2 percent to 299.2 pence. Barclays Plc downgraded RBS to equal weight, a recommendation similar to hold, from overweight. The brokerage said the tangible book value of RBS won’t rise above its 2013 level until 2016 because of cost pressures.
Crest Nicholson Holdings Plc (CRST) tumbled 4.3 percent to 382.8 pence. Deutsche Bank AG is selling a 6.6 percent stake in the company, according to terms obtained by Bloomberg News.
Hikma Pharmaceuticals Plc lost 3 percent to 1,621 pence. Jefferies Group LLC cut its recommendation on the London-based drugmaker to hold from buy, citing its valuation. Hikma is trading at 23.4 times its estimated earnings, compared with the five-year average of 19.74 times.
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To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Srinivasan Sivabalan
