By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks snapped a five-day losing
streak on Tuesday after data showed the country's economy last year
expanded at the strongest pace since 2007, although it slowed down
in the fourth quarter.
The FTSE 100 index rose 0.4% to 6,574.62 after closing at the
lowest level since Dec. 18 on Monday.
The benchmark was supported by news that the U.K.'s economic
growth in 2013 was the strongest since the financial crisis
started. The country's gross domestic product rose by 1.9% last
year compared with 2012, while fourth-quarter growth slowed to 0.7%
from 0.8% in the previous quarter, according to the Office for
National Statistics. Analysts broadly expected quarterly GDP to
fall to 0.7%.
"There are absolutely no signs of growth slowing anytime soon.
If anything, the risks are towards an acceleration," said Rob Wood,
chief U.K. economist at Berenberg, in a note.
"The bottom line then is that monetary policy is working. Credit
is flowing, uncertainty is down, confidence is returning,
employment is booming, and inflation is back to target. There is no
reason why monetary policy will not keep driving the U.K. forward,"
he added.
Among notable movers in London, mining firms posted some of the
biggest gains after Nomura lifted the European metals-and-mining
sector to neutral from bearish. The analysts said they expect
miners to see a 24% increase in earnings per share in 2014, versus
an expected 14% rise for the wider market.
"Our analysis suggests further upside potential as better
input-cost pricing dynamics, weaker commodity currencies and the
difficult-to-quantify benefits to costs from improved operational
efficiency could see cost estimates come in lower than the market
is pricing," they said.
BHP Billiton PLC (BHP) , up 1.6%, was Nomura's top pick within
the sector, followed by Rio Tinto PLC (RIO), rising 1.7%.
Precious-metals miner Fresnillo PLC bucked the positive trend
and declined 2.1%. The company said silver production will be
broadly flat in 2014 after a rise last year, while its gold output
is forecast to increase.
Shares of AMEC PLC lifted1.3% after the oil-field-services firm
said its AMEC Tekfen Azfen consortium has been awarded a $974
million contract for BP PLC's (BP) Shah Deniz gas field.
On a more downbeat note, shares of BG Group PLC declined 0.9%
after J.P. Morgan Cazenove cut the energy firm to neutral from
overweight following the company's profit warning on Monday.
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