By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s FTSE 100 index inched higher on
Tuesday, after solid data on the British retail and production
sectors added to evidence about the economic recovery.
The benchmark traded 0.1% higher at 6,626.01, after two days in
the red.
The index had traded in negative territory earlier in the day,
but started rising after an upbeat reading on the country's
production sector. The Office for National Statistics said U.K.
factories and industries increased production in June, lifting the
sector to its strongest quarterly performance in more than two
years. The ONS said it was the first time all 13 manufacturing
sectors rose since June 1992.
Additionally, a survey by the British Retail Consortium and HSBC
showed on Tuesday that total sales in the country rose 3.9% and
same-store sales climbed 2.2% in July, boosted by warm weather and
Andy Murray's Wimbledon win.
Among notable movers in London, HSBC Holdings PLC (HBC) lost
0.5% after Deutsche Bank cut the bank to hold from buy on the back
of a disappointing earnings result out on Monday.
"Though we think HSBC offers attractive medium-term gearing to
higher rates and stronger [U.S. dollar] at reasonable valuation, we
can't identify a near-term catalyst to see the stock re-rate and
see the bar for attractive yield as having risen, given
announcements from a number of U.K. peers," the analysts said.
Shares of GlaxoSmithKline PLC (GSK) dropped 0.9% after Citigroup
cut the drug maker to neutral from buy, saying the stock seems
fairly valued in the near term after a period of outperforming the
sector.
Unilever PLC (UL) erased 1.7% after J.P. Morgan Cazenove cut the
consumer-products firm to neutral from overweight, citing further
earnings risks.
Mining firms were also on the decline, as most metals prices
moved lower. Shares of Glencore Xstrata PLC dropped 3%, Randgold
Resources Ltd. gave up 2.6% and Anglo American PLC shaved off
2%.
Shares of Fresnillo PLC slid 6.8% after the silver miner posted
a drop in half-year pretax profit.
On a more upbeat note in London, shares of InterContinental
Hotels Group PLC rose 3% after the hotel operator posted a 7% rise
in half-year revenue and a 25% improvement in adjusted earnings per
share.
Shares of Legal & General Group PLC added 3.6% after the
insurance firm raised dividends 22%.
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