By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. equities rose Tuesday, after
investor concerns about the future of Ukraine somewhat softened and
as market heavweight Vodafone Group PLC pared losses.
The FTSE 100 Index picked up 0.6% to 6,605.28, paced by a 2.5%
rise in defense contractor BAE Systems PLC (BAESY) . The benchmark
on Monday gained 0.6%, marking its first winning session in six
days.
European stocks also broke free of losses, and U.S. stocks
advanced after Russian President Vladimir Putin indicated he didn't
want to split Ukraine, although he did sign a treaty to annex the
breakaway region of Crimea over the objections of Western
leaders.
As U.S. and European leaders debate how to respond, another key
event could be Ukrainian elections on May 25, when voters will
elect their next president.
"If a pro-Russian leader wins, Putin has in essence taken over
the whole country and make no mistake, he will be doing his best to
get his first choice elected," said Peter Boockvar, chief market
analyst at the Lindsey Group LLC, in a note Tuesday.
Shares of Vodafone Group PLC shed 0.1%, winning back almost all
their losses made after Fitch Ratings warned it may downgrade the
wireless firm's rating by one notch over the planned purchase of
Spanish cable firm Ono SA unless other measures are taken to reduce
debt.
Vodafone's leverage is low for a 'A-' rating, said Fitch, with
funds from operations adjusted net leverage expected to be 1.2
times at the end of March. But the planned deal with Ono, and
Vodafone's Project Spring investment program over the next few
years, "could push this metric to above 2.5x within 18 months,
which is the upper end of the leverage range for a 'A-'
rating."
Vodafone shares climbed 1.7% on Monday on the deal.
Among other stocks, J Sainsbury PLC tacked on 0.5%, as it held
on to its 17% market share even as quarterly sales declined. In the
10 weeks to March 15, Sainsbury posted a 1.5% fall in total sales,
and excluding fuel, total sales were down 1% during the period.
Sainsbury's figures follow last week's below-anticipated
projection from Wm. Morrison Supermarkets PLC that underlying
profit for the fiscal year 2014-2015 will drop between 460 million
pounds ($764 million) and GBP510 million. Morrisons shares also
turned higher Tuesday, rising 1%. At the same time, shares of Tesco
PLC edged up 0.24%.
Off the FTSE 100 Index, stock in Asos PLC fell 8.3% as the
online fashion company's raised capital expenditure plans will
likely pressure its yearly earnings.
Elsewhere in London, the Bank of England named three new senior
officials to join the central bank. Among them is Ben Broadbent,
who will become deputy governor of monetary policy.
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