By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks extended gains to close at a
13-year high on Wednesday, finding support in comments from the
International Monetary Fund calling for more growth in the
country.
The FTSE 100 index gained 0.5% to 6,840.27, closing at the
highest level since December 1999.
The index was helped higher after the IMF said it sees signs of
an uptick in growth in the U.K. It also called for new growth
measures and less austerity to help the country's economy.
"Financial policies are needed to restore the health of the
banking system, to ensure that monetary policy is fully effective,
and fiscal and structural policies are needed to raise expectations
of incomes and returns on investment," the IMF said in its annual
check of the U.K.
"The government has shown flexibility in its fiscal program to
mitigate damage to growth, but planned fiscal tightening this year
will be a drag on the economy."
The FTSE had traded in negative territory earlier in the day
after the Office for National Statistics reported retail sales
dropped 1.3% in April compared with March.
Additionally, minutes from the Bank of England's Monetary Policy
Committee May meeting showed the nine members voted unanimously to
keep interest rates unchanged at a record low 0.5%, while three
members voted in favor of increasing the bank's asset
purchases.
Gov. Mervyn King as well as Paul Fisher and David Miles
preferred to increase the size of the asset-purchase program by 25
billion pounds ($38 billion) to a total of GBP400 billion. The
votes were unchanged from the policy-setting meeting in April.
Shares of Lloyds Banking Group PLC (LYG) rose 2.3%, after the
bank said it expects to meet its additional capital requirements
without having to issue further equity or use contingent capital
securities.
Other banks were also higher, with Barclays PLC (BCS) up 3.3%
and Royal Bank of Scotland Group PLC (RBS) rising 2.2%.
Miners mostly showed positive moves, as most metals prices moved
higher. Antofagasta PLC gained 3.9%, Anglo American PLC added 2%
and BHP Billiton PLC (BHP) inched 1% higher.
Bucking the positive trend, shares of Kazakhmys PLC dropped 6%,
after UBS cut the miner to neutral from buy, citing lower
possibility of a merger agreement with Eurasian Natural Resources
Corp. . Shares of ENRC lost 2.3%.
Outside the major index in London, shares of Britvic PLC surged
11%, after the beverage firm said adjusted earnings per share rose
48% for the 28 weeks to April 14, while increasing dividends 1.9%
to 5.4 pence (82 cents).
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