Footsie advances first time in three days as Whitbread and Fresnillo rally

FTSE: 5,156.84 (+54.26) Mid-250: 10,071.17 (-12.94) Small Cap: 2,925.33 (-1709)UK STOCKS advanced for the first time in three days as shares of Whitbread and Fresnillo rallied. Whitbread paced advancing shares after reporting an acceleration in sales growth.

Fresnillo advanced 3.9 per cent. Barclays and Royal Bank of Scotland Group limited gains in the benchmark FTSE 100 Index, falling more than 2 per cent.

The FTSE 100 Index gained 54.26, or 1.1 per cent, to 5,156.84 at the 5:30pm close in London, after tumbling 5.8 per cent over the previous two trading days amid concern that global growth is slowing as Europe’s debt crisis spreads.

The FTSE All-Share Index gained 0.9 per cent yesterday, while Ireland’s ISEQ Index was little changed. The FTSE 100 climbed 3.2 per cent last week after the August slump of 7.2 per cent dragged equities to their cheapest valuation on estimated earnings since March 2009.

The gauge has still fallen 15 per cent from this years high in February.

“I don’t think anything has changed in terms of sentiment,” said Richard Hunter, head of UK equities at Hargreaves Lansdown in London.

“Investors are concentrating on the debt situation again. Until we get at least some sort of concrete strategy and plan on the table, volatility and fragility will remain.” Whitbread surged 7.3 per cent to 1,563 pence after the company said second-quarter revenue at outlets open at least a year rose 4.8 per cent in the 11 weeks to August 18th, led by stronger performances at its Premier Inn budget hotels and Costa Coffee shops.

That compared with growth of 1.7 per cent in the previous quarter.

Fresnillo climbed 3.9 per cent to 2,064 pence as Numis Securities raised its recommendation for the silver producer to “hold” from “reduce”.

Randgold Resources also advanced, jumping 3 per cent to 6,940 pence.

Numis upgraded the shares to “add” from “hold”.

RBS lost 2.8 per cent to 21.17 pence, extending yesterday’s 12 per cent slump, while Barclays dropped 2.2 per cent to 150.75 pence. A gauge of UK banks lost 5 per cent yesterday as the cost of insuring against default in Europe surged to a record amid signs that European lenders may be struggling to get funding.

– (Bloomberg)