Resource News

U.K. Stocks Gain, Led by Mining Companies; Rio, Xstrata Rise

Jan. 29 (Bloomberg) — The FTSE 100 Index climbed for the first time in three days, with the benchmark trimming its third straight weekly drop, as U.K. mining companies had their first advance this week.

Rio Tinto Group, the world’s third-biggest mining company, advanced 1.8 percent. Xstrata Plc added 1.5 percent. HSBC Holdings Plc rose 2.4 percent.

The benchmark FTSE 100 Index added 38, or 0.7 percent, to 5,183.74 as of 1:01 p.m. in London, trimming this week’s decline to 2.2 percent. The FTSE All-Share Index gained 0.7 percent today and Ireland’s ISEQ Index rose 0.2 percent.

The FTSE 100 is down 4.2 percent this month as the U.S. government called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. The gauge is still 48 percent higher than in March after governments and central banks around the world sought to encourage growth by maintaining low interest rates and committing more than $12 trillion to stimulate the economy.

“We saw the declines in the last few weeks as a healthy correction and used the opportunity to buy equities,” said Marc Vernooij, an Amsterdam-based portfolio manager at Aethra Asset Management, in a telephone interview. “For the next three to six months the outlook remains good. There’s some economic growth and from an equity perspective it is reassuring that companies have shown they are able to respond effectively to economic circumstances and are making profits.”

House Prices

U.K. house prices jumped in January by the most in five months as the economy emerged from recession, Nationwide Building Society said. The average cost of a home increased 1.2 percent from the previous month to 163,481 pounds ($263,842). Prices are now 8.6 percent higher than a year earlier and down 12 percent from their peak in October 2007.

U.K. consumer confidence rose in January for the first time in three months as Britons became more optimistic for the economy’s prospects, GfK NOP said.

HSBC rose 2.4 percent to 675.7 pence, snapping three days of declines. Barclays, the U.K.’s second-biggest bank, added 0.8 percent to 266.95 pence.

Rio Tinto gained 1.8 percent to 3,107.5 pence. Xstrata, the world’s fourth-largest copper producer, advanced 1.5 percent to 1,019.5 pence. BHP Billiton Plc climbed 1.6 percent to 1,872.5 pence.

A gauge of mining shares in the Stoxx 600 rose 1.2 percent, rebounding from seven consecutive days of declines. Stocks have fallen with metal prices amid concern the global economic recovery may stall, denting demand for raw materials.

Shell

Royal Dutch Shell Plc advanced 1.1 percent to 1,750.5 pence as crude oil rose for the first time in four days.

Europe’s second-largest oil company may need to cut more jobs this year to control operating costs as a recovery in energy demand waits until the second half.

“It’s normal in any business that you have to go further and you have to operate your operating expenditure in a very tough way,” Chief Executive Officer Peter Voser said in a Bloomberg Television interview in Davos, Switzerland. “As part of that, it may also mean that some more people have to go.”

Tate & Lyle Plc climbed 3.1 percent to 400.9 pence, rebounding from yesterday’s 4.5 percent plunge. The maker of the low-calorie sweetener Splenda was raised to “neutral” from “sell” at UBS AG.

In the U.S. the Commerce Department’s report on gross domestic product today may show the world’s largest economy expanded in the fourth-quarter at a 4.7 percent pace, the most since the first quarter of 2006, according to a Bloomberg News survey. The figures are due at 8:30 a.m. in Washington.

The following stocks also rose or fell in the U.K. market. Symbols are in parentheses.

Connaught Plc (CNT LN) plunged 8.6 percent to 328.9 pence. The U.K.’s biggest public housing maintenance company said Chief Executive Officer Mark Davies stepped down and will be replaced by Mark Tincknell.

Informa Plc (INF LN) rose 3.3 percent to 327.6 pence, a third straight gain. The U.K. publisher of Lloyd’s list advanced after Credit Suisse Group AG initiated coverage of the stock with an “outperform” recommendation.

Resolution Ltd. (RSL LN) climbed 1 pence, or 1.3 percent, to 80 pence, a second gain this week. The buyout company was given a “buy” recommendation in new coverage at Icap Plc…read more at the Bloomberg