LONDON MARKETS: U.K. Stocks Index Up As Unemployment Falls

Date : 07/18/2012 @ 11:24AM
Source : Dow Jones News
Stock : Bhp Billiton Plc Sponsored Adr (BBL)
Quote : 30.9  -0.38 (-1.21%) @ 4:02PM

LONDON MARKETS: U.K. Stocks Index Up As Unemployment Falls

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By Preeti Upadhyaya, MarketWatch

LONDON (MarketWatch) -- An unexpected drop in U.K. unemployment boosted the stock market Wednesday, while the Bank of England voted in favor of the Funding for Lending Scheme.

The FTSE 100 index was up 0.9% at 5,679.11.

London's main equities benchmark got a lift from the U.K. unemployment rate, which dropped to 8.1% for the three-month period ending in May, down from 8.3% in the previous period and better than the 8.2% consensus that analysts polled by Factset Research had forecast.

The Bank of England voted in favor of boosting asset purchases by 50 billion pounds ($78.2 billion) in what is known as the Funding for Lending Scheme, designed to boost economic activity and the credit supply.

The Monetary Policy Committee voted unanimously to keep the bank's key interest rate unchanged at 0.5%, but are "keeping the door open" to an autumn rate cut, according to a note from analysts at Danske Bank.

Weakness in gold futures, down lately about 1%, filtered through to a handful of mining-sector shares traded in London.

Precious-metals firm Fresnillo PLC led the FTSE 100 higher, rising 2% after reporting record gold production in the fiscal second quarter.

Mining giant BHP Billiton (BHP) rose 1.5%, having reported strong fourth-quarter production results and highlighting a 12th consecutive annual production record from its iron-ore mining operations in Western Australia.

Rio Tinto PLC(RIO) was up 0.3%. Metal prices were down overall.

Also on the move, shares of investment firm Ashmore Group PLC climbed 2.8% after Goldman Sachs upgraded its rating to buy from neutral.

Heavyweight bank HSBC Holdings PLC (HBC) slipped 0.2%, as a top compliance executive said Tuesday he would step down in response to an ongoing U.S. government investigation into money laundering.

G4S PLC rose 2.5%, rebounding from losses earlier in the week as it grappled with its London Olympics security-contract fiasco.

Weighing on the market, RSA Insurance Group PLC rose 0.4% even after saying in a statement that record rains in the U.K. could cost firm around 40 million pounds, or $62.5 million.

United Utilities Group PLC fell 0.7%, while Reed Elsevier PLC dropped 2.1% and Hammerson PLC shed 0.5%.

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