By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks rose Tuesday, with shares in
Aberdeen Asset Management PLC and BHP Billiton PLC supporting the
equity market as it entered the second quarter.
The U.K.'s FTSE 100 rose 0.8% to 6,652.61. The benchmark on
Monday closed the first three-month period of this year with a loss
of 2.2%, the first quarterly decline since the second quarter of
2013.
U.K. stocks pushed to intraday highs following a rally on Wall
Street as U.S. manufacturers said business picked up pace slightly
in March, and expect the economy to underpin demand in the spring.
The S&P 500 index (SPX) hit its best intraday level since late
March.
Contributing the FTSE's advance were shares of Aberdeen Asset
Management PLC , topping gainers with a jump of 6.7% as the company
said outflows from its funds slowed in March. Aberdeen also said it
has identified and is implementing "significant additional costs
savings" beyond what it expected from its purchase of Scottish
Widows Investment Partnership.
Miner BHP Billiton (BHP) was also among the best performers,
rising 2.1% after the company said it may continue to adjust its
portfolio to focus on up to five key commodities. BHP reportedly is
considering a 20 billion Australian dollar ($18.5 billion) spinoff
of certain assets.
On a broader front, market-research firm Markit reported a final
March reading of 53.0 for its euro-zone manufacturing Purchasing
Managers' Index, unchanged from a previous estimate.
While the U.K.'s manufacturing sector grew in March, weaker
demand from overseas resulted in a slower overall pace in growth.
The U.K. PMI was 55.3 in March, according to Markit and the
Chartered Institute of Purchasing & Supply. That was down from
56.2 in February, and short of expectations of a 56.7 reading.
The FTSE 100 largely held its advance after the data, but the
British pound (GBPUSD) declined against the U.S. dollar.
While the headline U.K. PMI figure fell short of expectations,
the number is positive and "shows the U.K. economy is on the right
path to recovery," said Alex Edwards, corporate-desk head at
UKForex in a note Tuesday.
"Coming off the back of the strong retail sales data last week,
and the possibility of other PMIs printing close to expectations
later this week, we think there could be enough momentum to take
GBP/USD back through 1.67 and 1.68 in the near-term," said
Edwards.
In other developments Tuesday, the U.K.'s independent
public-spending watchdog said the U.K. government could have
received a better deal for taxpayers when it privatized Royal Mail
PLC . Caution by the government in several areas led to shares of
Royal Mail being priced well below the level at which they started
trading, said the National Audit Office, while the U.K. government
has defended its actions. Royal Mail shares closed up 0.4% on
Tuesday.
Meanwhile, the Bank of England's financial policy committee, in
minutes from its most recent meeting, warned that investors could
experience significant losses on riskier trades if they are
complacent in the face of rising interest rates.
More news from MarketWatch:
Russian manufacturing contracts for a fifth month
7 ways the Nasdaq's changed since the tech crash
Subscribe to WSJ: http://online.wsj.com?mod=djnwires