House builder Barratt Developments drops after trading update
By Simon Kennedy, MarketWatch
LONDON (MarketWatch) — U.K. stocks climbed Wednesday, helped by further strong gains for banks and miners, while retailers lost ground after a trading update from supermarket chain J Sainsbury PLC.
The benchmark FTSE 100 index (UK:UKX 6,047, +32.63, +0.54%) rose 0.5% to 6,043.19 in morning trading, as other European markets also rallied ahead of a Portuguese debt auction.
Bank stocks were mostly higher. Shares in HSBC Holdings (UK:HSBA 709.40, +20.70, +3.01%) (HBC 53.62, +1.16, +2.21%) climbed 3%, extending gains from the previous session when it was upgraded to buy at Citigroup.
Shares in Lloyds Banking Group (UK:LLOY 67.03, +0.85, +1.28%) (LYG 4.10, +0.04, +0.99%) , however, edged down 0.3% after the lender was downgraded to underweight from equal-weight at Barclays Capital.
Among mid-cap financial stocks, shares in fund manager Henderson Group (UK:HGG 153.00, +14.80, +10.71%) jumped over 11% after it agreed to buy smaller rival Gartmore Group (UK:GRT 101.00, +10.40, +11.48%) in an all-stock deal. Gartmore shares climbed 12%.
Mining stocks benefitted from a rise in commodity prices. Shares in Kazakhmys PLC (UK:KAZ 1,665, +53.00, +3.29%) gained 2.9% and Vedanta Resources PLC (UK:VED 2,489, +78.00, +3.24%) added 2.7%.
On the downside Wednesday, shares in several retailers were lower following a trading update from supermarket chain J Sainsbury PLC (UK:SBRY 385.20, -5.20, -1.33%) (UK:SBRY 385.20, -5.20, -1.33%) .
The retailer reported a 7.5% rise in total sales for the third quarter and a 5.4% rise in comparable sales, but its shares dropped 1.4%.
Seymour Pierce analyst Kate Calvert said the figures appear to confirm that Sainsbury achieved the fastest growth of the major food retailers over the Christmas period. But Calvert stuck to her sell recommendation, saying that the growth is already reflected in the group’s premium valuation when compared to rivals.
Among other retailers, shares in Tesco PLC (UK:TSCO 418.85, -6.50, -1.53%) dropped 1.2% and Marks & Spencer Group PLC (UK:MKS 370.30, -2.90, -0.78%) slipped 0.8%.
House builder Barratt Developments PLC (UK:BDEV 94.50, -0.40, -0.42%) was another faller. The stock fell around 1% after the company reported a fall in the number of completions in the first six months of its fiscal year and said growth for the rest of the year is likely to be limited.
