By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — U.K. stocks extended gains to close at a 13-year high on Wednesday, finding support in comments from the International Monetary Fund calling for more growth in the country.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.36% gained 0.5% to 6,840.27, closing at the highest level since December 1999.
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The index was helped higher after the IMF said it sees signs of an uptick in growth in the U.K. It also called for new growth measures and less austerity to help the country’s economy.
“Financial policies are needed to restore the health of the banking system, to ensure that monetary policy is fully effective, and fiscal and structural policies are needed to raise expectations of incomes and returns on investment,” the IMF said in its annual check of the U.K.
“The government has shown flexibility in its fiscal program to mitigate damage to growth, but planned fiscal tightening this year will be a drag on the economy.”
The FTSE had traded in negative territory earlier in the day after the Office for National Statistics reported retail sales dropped 1.3% in April compared with March.
Additionally, minutes from the Bank of England’s Monetary Policy Committee May meeting showed the nine members voted unanimously to keep interest rates unchanged at a record low 0.5%, while three members voted in favor of increasing the bank’s asset purchases.
Gov. Mervyn King as well as Paul Fisher and David Miles preferred to increase the size of the asset-purchase program by 25 billion pounds ($38 billion) to a total of £400 billion. The votes were unchanged from the policy-setting meeting in April.
Shares of Lloyds Banking Group PLC /zigman2/quotes/202285510/delayed UK:LLOY -1.71% /zigman2/quotes/200709414/composite LYG -4.31% rose 2.3%, after the bank said it expects to meet its additional capital requirements without having to issue further equity or use contingent capital securities.
Other banks were also higher, with Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC -2.03% /zigman2/quotes/206581728/composite BCS -4.74% up 3.3% and Royal Bank of Scotland Group PLC rising 2.2%.
Miners mostly showed positive moves, as most metals prices moved higher. Antofagasta PLC /zigman2/quotes/200173667/delayed UK:ANTO -0.08% gained 3.9%, Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL -0.66% added 2% and BHP Billiton PLC /zigman2/quotes/208108397/composite BHP -0.92% /zigman2/quotes/201448516/delayed AU:BHP -1.25% inched 1% higher.
Bucking the positive trend, shares of Kazakhmys PLC /zigman2/quotes/208098927/delayed UK:KAZ +0.19% dropped 6%, after UBS cut the miner to neutral from buy, citing lower possibility of a merger agreement with Eurasian Natural Resources Corp. . Shares of ENRC lost 2.3%.
Outside the major index in London, shares of Britvic PLC /zigman2/quotes/208055220/delayed UK:BVIC -1.77% surged 11%, after the beverage firm said adjusted earnings per share rose 48% for the 28 weeks to April 14, while increasing dividends 1.9% to 5.4 pence (82 cents).