MW: U.K. shares rebound as mining, oil stocks gain
Carnival shares gain; construction stocks volatile after competition fines
LONDON (MarketWatch) -- U.K. stocks moved higher Tuesday as strong gains for natural resources stocks helped the region recover from the previous session's losses, though construction stocks were volatile after several firms were fined by the competition regulator.
Mining stocks posted strong gains, with BHP Billiton (UK:BLT 1,740, +38.00, +2.23%) (BHP 65.58, -1.38, -2.06%) gaining 2.2% and Anglo American (UK:AAL 2,102, +52.00, +2.54%) adding 2.3% as commodity prices strengthened.
Rio Tinto (UK:RIO 2,737, +93.60, +3.54%) (RTP 174.23, -4.82, -2.69%) added 2.5% after it also announced a deal to sell its Alcan Composites business to Switzerland's Schweiter Technologies (CH:SWTQ 500.00, +60.00, +13.64%) for $349 million.
Oil and gas heavyweights BP (UK:BP. 566.40, +9.50, +1.71%) (BP 54.41, -0.38, -0.69%) and Royal Dutch Shell (UK:RDSA 1,822, +25.50, +1.42%) (RDS .A 59.69, +0.01, +0.02%) rose 1.6% and 1.1% respectively as oil prices climbed. The October-dated light-crude contract climbed 76 cents to $70.47 in electronic trading.
The U.K.'s main FTSE 100 index (UK:UKX 5,179, +44.40, +0.87%) rose 52.01 points, or 1%, to 5,186.37.
Among other gainers, shares in Carnival (UK:CCL 2,145, +84.00, +4.08%) (CCL 32.00, -0.26, -0.81%) rose 3.3% after Merrill Lynch added the cruise ship operator to its "Europe 1" list of preferred stocks just ahead of its results.
The broker said it sees "significant opportunities" for net-revenue-yield improvement and believes the company offers an attractive way of playing a U.S.-led consumer recovery.
Construction stocks were volatile after the Office of Fair Trading said it fined 103 firms 129.5 million pounds ($209.7 million) for alleged collusion on building contracts between 2000 and 2006.
Shares in Kier Group (UK:KIE 1,278, -14.00, -1.08%) , Carillion (UK:CLLN 282.20, -6.10, -2.12%) and Balfour Beatty (UK:BBY 335.70, -4.20, -1.24%) all lost more than 1% after they received bigger-than-average fines.
Among other movers, Misys (UK:MSY 202.30, +6.60, +3.37%) rose 4.2% after UBS upgraded the software company to buy from neutral, saying the stock has underperformed compared to peers such as Sage (UK:SGE 226.70, +2.10, +0.93%) and Logica (UK:LOG 132.30, -0.30, -0.23%) .
Pharmaceuticals group Shire (UK:SHP 1,094, +25.00, +2.34%) also benefited from a broker upgrade after it was lifted to hold from underperform by Jefferies International, which cited the company's forecast for earnings-per-share growth of more than 20% from the second quarter of 2010.
