Bloomberg News

U.K. Stocks Post Biggest Four-Day Advance Since November 2008

October 10, 2011

Oct. 10 (Bloomberg) -- U.K. stocks climbed, as the benchmark FTSE 100 Index posted its biggest four-day gain since November 2008, as German and French leaders pledged to create a plan in three weeks to recapitalize banks.

Premier Oil Plc gained 3.3 percent as the U.K. oil explorer said it began production at its Chim Sao project in Vietnam and after UBS AG, Morgan Stanley and HSBC Holdings Plc upgraded its shares. Burberry Group Plc, the U.K.’s largest luxury-goods maker, advanced 1.7 percent. Kazakhmys Plc increased 3.4 percent after Morgan Stanley picked it as a preferred copper miner.

The FTSE 100 Index rose 95.60, or 1.8 percent, to 5,399 at the 4:30 p.m. close in London. The gauge surged 9.2 percent in the last four days. The broader FTSE All-Share Index also added 1.8 percent today and Ireland’s ISEQ Index increased 1.1 percent.

“Despite the lack of any material initiatives, it’s good news that the two most important European Union leaders have committed themselves to deliver results and provide the market with a fixed date,” Mikkel Petersen, a senior equity adviser at Nordea Private Bank in Copenhagen, wrote in a note to clients today. “This should help curb day-to-day volatility.”

German Chancellor Angela Merkel and French President Nicolas Sarkozy gave themselves until the end of October to devise a plan to recapitalize banks, get Greece on the right track and fix the euro area’s economic governance.

Premier Oil, BP

Premier Oil advanced 3.3 percent to 372.4 pence after saying it began producing oil at Chim Sao. UBS raised the shares to “buy” and HSBC and Morgan Stanley upgraded them to “overweight.”

BP Plc, Europe’s second-biggest oil producer, advanced 2.9 percent to 405.15 pence as oil rose 3.2 percent. Amec Plc, the oil and gas engineering firm, gained 2.7 percent to 852 pence.

A gauge of miners on the Stoxx Europe 600 Index was the best performing of the 19 industry groups in the gauge.

The European crisis is the biggest risk for industrial metals, with a possible Chinese slowdown viewed as less of a concern, Macquarie Group Ltd. said in a report today. Metals are oversold, with “macroeconomic fear currently outweighing still- robust fundamentals,” the bank said, citing a poll taken during last week’s London Metal Exchange Week.

Miners Rally

Anglo American Plc headed miners higher, gaining 3.7 percent to 2,417 pence. Rio Tinto Plc., the world’s second- biggest miner by output, rose 2.6 percent to 3,247.5 pence. Kazakhmys rose 3.4 percent to 886.5 pence after Morgan Stanley said it picked the London-based Central Asian miner as a preferred copper miner. Antofagasta Plc, the copper miner controlled by Chile’s richest family, the Luksic, rose 2.9 percent to 1,094 pence.

Imagination Technologies Group Plc gained 3.2 percent to 428.4 pence after JPMorgan Chase & Co. named the computer chip technology firm its top European semiconductor pick. ARM Holdings Plc, which designs chips for Apple Inc.’s iPhone, gained 6.6 percent to 591 pence.

Sportingbet Plc dropped 19 percent to 37 pence and U.K. bookmaker Ladbrokes Plc declined 0.8 percent to 119.7 pence after the latter said talks with Sportingbet have been “mutually terminated.” In a separate statement, Sportingbet said it is not in discussions with any other party about a possible offer.

Burberry advanced 1.7 percent to 1,261 pence after Societe Generale said in a note to clients that shares in the luxury goods maker have “priced in” the risk of recession.

--Editors: Srinivasan Sivabalan, Peter Branton

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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