U.K. Stocks Rise, Led by Barratt, Taylor Wimpey; Punch Declines

By Maud van Gaal

Dec. 16 (Bloomberg) -- U.K. stocks climbed, erasing yesterday’s decline, led by homebuilders after Citigroup Inc. advised clients to buy the shares.

Barratt Developments Plc, Taylor Wimpey Plc and Redrow Plc. all gained more than 2.5 percent. Punch Taverns Plc dropped after saying trading in the last four months remained “difficult.”

The benchmark FTSE 100 Index advanced 32.19, or 0.6 percent, to 5,317.96 at 9:39 a.m. in London. The index has rebounded 51 percent since March and is heading for its biggest annual gain since 1997 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy. The FTSE All-Share Index rose 0.6 percent today, while Ireland’s ISEQ Index declined 0.3 percent to 2,914.56.

Barratt Developments, Taylor Wimpey and Redrow were raised to “buy” at Citigroup, which said in a report “we think the negative market sentiment is overdone and that the whole sector now looks good value on a 12-month basis.”

Barratt advanced 3.3 percent to 113 pence. Taylor Wimpey added 2.6 percent to 34.81 pence. Redrow surged 5.5 percent to 129.2 pence.

Amec Plc added 2 percent to 770 pence, paring yesterday’s 2.5 percent drop. The U.K.-based energy engineering company was raised to “buy” from “hold” at Societe Generale SA, which cited “a likely acceleration in growth starting in 2010.”

Punch

Punch Taverns Plc dropped 0.9 percent to 80.45 pence. The largest U.K. pub owner said trading in the 16 weeks until Dec. 12 “remained difficult” and operating margins have “stabilized.”

“The challenging economic environment and our smaller pub estate will affect profitability in the short-term.” the Burton upon Trent, England-based company said in a statement today.

Drax Group Plc, the owner of western Europe’s biggest coal- fired power plant, said full-year earnings before interest, tax, depreciation and amortization will “modestly” beat analyst estimates. The shares advanced 2.7 percent to 421.1 pence.

Federal Reserve Chairman Ben S. Bernanke and his colleagues may indicate the U.S. recovery is gaining strength while repeating a pledge to keep the benchmark interest rate almost at zero for an “extended period.”

The Federal Open Market Committee gathers as growth in the final quarter of 2009 accelerates to more than 4 percent, the fastest pace in almost four years, according to analysts’ forecasts. The FOMC will probably discuss how to eventually withdraw unprecedented programs to revive credit, including purchases of $1.43 trillion in housing debt, economists said.

The following shares also rose or fell in U.K. markets. Stock symbols are in parentheses.

AstraZeneca Plc (AZN LN) climbed 1.3 percent to 2,865.5 pence. The U.K.’s second-largest drugmaker won a U.S. panel’s backing to expand use of the cholesterol pill Crestor in the prevention of heart disease, a move that, if allowed, may add $500 million to annual sales.

United Business Media Ltd. (UBM LN) advanced 2.9 percent to 464.4 pence, a fifth day of gains. The publisher of Information Week and owner of PR Newswire was raised to “buy” from “neutral” at Nomura Holdings Plc.

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net.