By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks rose Thursday, with mining
giant Rio Tinto PLC gaining after it revealed plans for a share
buyback. Meanwhile, the British pound moved higher on anticipation
the Bank of England's next policy move would be an interest-rate
increase.
The FTSE 100 rose 0.2% to 6,833.44. It climbed by as much as
0.5% intraday, rising along with the broader European equity market
following an agreement among European leaders that a cease-fire in
Ukraine will begin on Sunday.
In London, shares of market heavyweight Rio Tinto (RIO) climbed
3.7% after the company said Thursday it will repurchase $2 billion
(GBP1.31 billion) of its shares. Rio Tinto's full-year net profit
jumped to $6.5 billion, from $3.67 billion a year ago, although the
earnings fell short of the $8.38 billion expected in a Wall Street
Journal poll of analysts.
Shares of fellow miners Glencore PLC and Anglo American PLC were
also higher, by 2.7% and 2.6%, respectively.
Advancers also included Shire PLC , up 2% after
better-than-expected financial results from the drug maker, and
Burberry Group PLC shares gained 1.8% as RBC Capital Markets
initiated coverage of the luxury-goods maker with an outperform
rating, citing its "digital leadership," expansion of its beauty
business, and high exposure to the U.S. market.
Burberry "deserves a higher P/E valuation premium to luxury
peers thanks to its stronger top- and bottom-line growth potential,
superior [return on invested capital] and attractive cash-return
outlook," said RBC analysts Claire Huff and Rogerio Fujimori in a
note to clients.
But shares of EasyJet PLC fell 1.2% following a downgrade at
Goodbody to sell from hold. Tullow Oil shares were down 2.2%,
adding to their 6% loss on Wednesday after the Africa-focused oil
explorer swung to a loss for 2014 and would suspend its
Sky PLC shares slipped 0.1% as the broadcaster's rating at
Bernstein was cut to market-perform from outperform.
Sterling: The currency (GBPUSD) popped up to $1.5356 after the
Bank of England signaled it remains on course to raise the
country's key interest rate as policy makers upgraded both their
inflation and growth forecasts. It now expects inflation to reach
1.96% in two years, compared with its forecast in November of 1.8%,
although the bank also noted the rate could briefly turn negative.
The pound was trading at $1.5228 ahead of the report, and at
$1.5239 late Wednesday.
The key interest rate stands at 0.5%, a record low. But the bank
also noted that it would be open to cutting the rate even further
or launch a new round of asset purchases if inflation and growth
prospects worsen.
"We expect further sterling appreciation ahead -- even against
the U.S. dollar--as the currency secures its status alongside the
greenback among the major currencies whose central banks remain on
easing mode," said Ashraf Laidi, chief global strategist at City
Index, in a note.
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