MW: Banks and oil firms lift U.K. stocks after data
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — U.K. stocks jumped Tuesday, with oil firms and banks providing the most support, as manufacturing data showed a surprise improvement in May, while Marks & Spencer Group PLC rose after reporting earnings.
The FTSE 100 index UK:UKX +0.58% gained 0.9% to 5,676.14, after wobbling in early action.
Oil firms provided the most support, as the Norwegian government stopped a petroleum-industry labor strike and prevented an industry lockout, which was planned to start at midnight Tuesday.
The lockout could have taken about 2 million barrels of crude oil a day off the market, more than was caused by disruptions in Libya last year. Related story: Norway won’t tolerate a lengthy oil strike.
BP PLC UK:BP +1.09% BP +0.10% rose 1.3%, and Royal Dutch Shell PLC UK:RDSA +0.88% UK:RDSB +0.93% RDS.A -0.68% RDS.B -1.01% also gained 1.3%.
The broader U.K. stock market struggled for direction in early trade but was sent firmly into positive territory after better-than-expected U.K. manufacturing data.
The U.K. Office for National Statistics said that manufacturing output rose 1.2% on a monthly basis in May, exceeding analysts’ expectations of a 0.2% decline. See: U.K. May manufacturing output rises 1.2%.
Further on the data front, the U.K.’s seasonally adjusted trade deficit in goods narrowed to 8.4 billion pounds ($13 billion) in May from 9.7 billion pounds in April. See: U.K. May trade gap narrows as exports rise.
Banks headed north after the data releases, with HSBC Holdings PLC UK:HSBA +0.57% HBC -0.30% rising 1.2%, Royal Bank of Scotland Group PLC UK:RBS +1.17% RBS +2.39% up 1.8% and Standard Chartered PLC UK:STAN +1.69% 1.7% higher.
Barclays PLC UK:BARC +2.39% BCS -0.39% rose 2.5% as Chairman Marcus Agius said Bob Diamond, former chief executive, would forgo any deferred bonus he would have been entitled. Diamond stepped down last week as political pressure intensified in the wake of an interest-rate scandal, where the bank will pay around $452 million in penalties to settle charges.
Mining firms were also higher, shaking off disappointing Chinese import data. See: China imports disappoint, exports slow
Xstrata PLC UK:XTA +2.19% gained 3.2%, BHP Billiton PLC UK:BLT +0.77% BHP -0.94% took on 1.4% and Anglo American PLC UK:AAL +1.10% picked up 1.7%.
Marks & Spencer Group PLC UK:MKS +2.71% added 2.5% after the retailer reported a 0.7% drop in group sales for the quarter ending June 30 but said its estimates for the financial year 2012-13 remained unchanged.
Bucking the positive trend in London, catering firm Compass Group PLC UK:CPG -2.69% gave up 2.8% after peer Sodexo SA FR:SW -5.72% confirmed its full-year guidance, “despite a very challenging economic environment.” See: Sodexo confirms guidance, environment challenging .
Sara Sjolin is a MarketWatch reporter, based in London.
