By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks rose Wednesday, gaining
alongside European stocks as investors bet on further stimulus
measures from the European Central Bank.
The FTSE 100 ended up 0.8% at 6,419.83, the first advance in
2015, as just 13 of the index's components finished lower.
The benchmark rose as much as 1.5% following the release of a
below-consensus report on eurozone consumer prices. The data coming
from Eurostat appear to "strengthen the case for there to be some
kind of quantitative easing or monetary easing in the short-term
rather than in the medium-term," said Richard Hunter, head of
equities at Hargreaves Lansdown.
The eurozone is the U.K.'s largest trading partner, and weakness
there has had a dampening effect on the U.K. economy.
In the key energy group, BP PLC (BP) rose 1% and Royal Dutch
Shell PLC (RDSB) turned 1.6% higher. The oil company has agreed to
pay about $80 million to compensate a Nigerian community for damage
from two oil spills in 2008. Shares of oil producer BG Group PLC
shed 0.4%.
The oil sector has been hammered in recent weeks as oil prices
have slid to more than five-year lows. Brent crude on Wednesday
briefly fell below $50 a barrel for the first time since May
2009.
In terms of oil generally, "investors are starting to appreciate
that there's a flip side to lower oil prices which is positive
particularly for consumers, on the basis that it's effectively a
tax cut, especially at the petrol pumps, and, of course, airlines
and travel stocks," said Hunter.
Retail stocks had strong showing after J Sainsbury PLC reported
a narrower-than-expected decline of 1.7% in fiscal third-quarter
same-store sales, excluding fuel. The period included the key
Christmas season. Sainsbury shares (JSAIY) had been at the top of
FTSE earlier Wednesday, but eventually fell 1.9%.
While comparable sales were better than expectations "this is
still a strategically concerning result," said David McCarthy, head
of European consumer retail research, at HSBC in a note. "An
improved consumer environment...may help to a degree, but we
believe that the sector's defining factor this year will be Tesco's
strategy."
Tesco PLC (TSCDY), Britain's largest supermarket chain, is due
to release a trading update on Thursday. Tesco shares ended 2.1%
higher on Wednesday. Department store operator and food retailer
Marks & Spencer PLC rose 2.2% while Wm Morrison Supermarkets
PLC shares turned 1.1% lower.
Meanwhile, Aggreko PLC shares rose 3.3% as the temporary-power
provider said it sees a small increase in 2014 profit after it won
a two-year contract in Argentina and extended an existing contract
with the same customer by two years.
Persimmon shares added 1.1% following the home builder's report
that it sold 17% more homes at higher prices in 2014.
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