By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in the U.K. rose Tuesday, with
the FTSE 100 benefitting from gains in BP PLC shares, but Shire PLC
was knocked off the list of advancers as prospects of a takeover
offer for the biopharmaceutical firm dimmed.
The FTSE 100 settled higher by 1% at 6,769.91, building on
Monday's gain of 0.2% when drug maker AstraZeneca PLC jumped 14% on
indications Pfizer Inc. (PFE) may step up its takeover efforts.
AstraZeneca shares on Tuesday slipped 0.7%.
Shire shares had been the best price performer for much of the
session, but they turned lower by 0.7% following a Bloomberg report
that potential suitor Allergan Inc. (AGN) has approached Sanofi
(SNY), Johnson & Johnson (JNJ) and other companies to gauge
their interest in buying the company.
Shire shares had earlier jumped by as much as 6.2% in the wake
of a Reuters report Monday that Allergan had contacted Shire about
a potential acquisition but the talks didn't pan out. Allergan
itself is currently being pursued by larger rival Valeant
Pharmaceuticals (VRX) in partnership with activist investor Bill
Ackman.
Shares of FTSE 100 heavyweight BP , meanwhile, extended their
rise to 2.9% after the oil major raised its dividend to 9.75 cents
a share from 9 cents a share last year. First-quarter production
fell 8.5% to 2.13 million barrels of oil a day and revenue declined
to $91.71 billion from $94.11 billion a year ago.
London-listed stocks held steady after the U.K. Office for
National Statistics said the economy grew by 0.8% in the first
three months of the year, just shy of the 0.9% growth analysts
polled by The Wall Street Journal had expected. The quarterly rate
was also lower than the Bank of England's estimate of 1%. Gross
domestic product for the first quarter rose 3.1% on a
year-over-year basis. Read: UK figures put BOE in sweet spot
"The details paint the picture of a broad-based recovery not
devoid of business investment, not just dependent on the consumer
to rally around," said Nick Beecroft, senior markets analyst at
Saxo Bank in an interview Tuesday, adding that GDP may be upwardly
revised toward 1%. Trade is now being impacted by strength in the
pound, but eventually "trade can start to pull its weight as well,"
as the U.S. and euro-zone economies improve and as China
stabilizes, said Beecroft.
The pound (GBPUSD) initially dropped against the U.S. dollar
after the data, to $1.6799, from $1.685 earlier Tuesday and
Monday's level around $1.6809. Britain's currency has since come
off its lows to buy $1.6829.
Meanwhile, the Bank of England will test how major British banks
would fare under a 35% drop in housing prices and a jump in
interest rates as a way to measure their resilience in times of an
economic shock. The tests will run alongside wider European bank
stress tests. Banking stocks moved higher for the day, with HSBC
Holdings PLC (HSBC) advancing 1.7%, Royal Bank of Scotland PLC
(RBS) climbing 1.9%, Lloyds Banking Group PLC gaining 1.2% and
Barclays PLC rising 0.5%.
Separately, Barclays said the chief executive of its U.S.
division, Hugh (Skip) McGee III will step down at the end of this
month, to be succeeded by Joe Gold, who serves as global head of
client capital management, on May 1.
Off the FTSE 100, government-services provider Serco Group PLC
warned of a possible downward revision to its expectations,
spurring a 15% slide in shares.
More news from MarketWatch:
FBI unit to help find pillaged foreign assets
Cirrus Logic to buy Wolfson Microelectronics PLC
Subscribe to WSJ: http://online.wsj.com?mod=djnwires