By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks rose Monday, with Tesco PLC
helping drive the FTSE 100 benchmark to a third consecutive
advance, but commodity shares lagged behind the broader market.
The FTSE 100 picked up 0.5% to 6,585.53, edging back into
positive territory on a year-to-date basis, according to FactSet
data. The London benchmark rose alongside other European markets as
investors eyed the prospect of sovereign bond buying by the
European Central Bank.
Among the shares riding higher on the FTSE were Travis Perkins
PLC and Tesco , closed up by 4.3% and 1.5%, respectively. The
building-materials supplier's rating was upgraded to overweight
from neutral at J.P. Morgan Cazenove, while the supermarket chain
was upgraded to overweight from equal-weight at Morgan Stanley.
Tesco "has scope to materially improve its U.K. operations,"
said Morgan Stanley. This, combined with a refocusing of its asset
portfolio, should see the retailer's shares outperform in the next
12 months, its analysts said. Morgan Stanley raised its
price-target on the stock to GBP2.60 and said its "bull-case"
target is GBP3.30.
J.P. Morgan said Travis Perkins is a "high-quality play on a
U.K. housing market in the early stages of recovery." Initiatives
that have been under way at the company should "start delivering
meaningful returns" and medium-term cash generation will become an
increasing focus over the 12 months to 24 months, the analysts
said.
In a busy day at J.P. Morgan Cazenove, analysts on Monday cut
ratings on a clutch of major oil companies. Royal Dutch Shell PLC
was cut to neutral from overweight, and BP PLC to underweight from
neutral. BP shares fell 1.1%, while Shell's were fractionally
lower.
But shares of BG Group PLC swung higher by 0.3%, as its shares
were raised to neutral from overweight by J.P. Morgan.
Oil futures declined Monday as J.P. Morgan slashed its price
forecasts and investors braced for another week of potential market
upheaval.
Mining stocks were also lower Monday, as prices for a number of
metals fell. Glencore PLC lost 1.9%, Anglo American PLC declined
0.9% and Rio Tinto PLC (RIO) shed 1.1%.
BHP Billiton PLC (BHP) shares were off 1.4% following a Reuters
report that the miner may have to cut $4 billion in planned
spending on U.S. shale wells. The report said BHP may also write
down shale assets as it grapples with falling prices for key
metals, including iron ore and copper.
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