Bloomberg News

Most U.K. Stocks Gain on China Support for Europe; HSBC Advances

February 15, 2012

Feb. 15 (Bloomberg) -- Most U.K. stocks rose as China said it will help resolve Europe’s debt crisis and the leaders of Greece’s two biggest political parties gave written commitments to austerity measures to obtain further financial aid.

HSBC Holdings Plc, Europe’s biggest lender, and Barclays Plc led bank shares higher. Morgan Crucible Plc rallied 8.3 percent after posting full-year profit that topped estimates.

The FTSE 100 Index slipped 7.71, or 0.1 percent, to 5,892.16 at the close in London as three stocks climbed for every two that dropped. The measure has rallied 19 percent from last year’s lowest level as the European Central Bank increased lending to banks and U.S. economic reports exceeded estimates. The FTSE All-Share Index also decreased 0.1 percent today, while Ireland’s ISEQ Index rose 1.2 percent.

“Markets have taken heart from comments from China early this morning that they will help resolve the euro crisis,” said Louise Cooper, a markets analyst at BGC Partners in London.

Gains on the FTSE 100 were limited today as AstraZeneca Plc, GlaxoSmithKline Plc and BP Plc shares all traded without the right to the latest dividend.

China said it will get more involved in the EU’s bailout funds and maintain its holdings of euro assets.

China Support

“China will always adhere to the principle of holding assets of EU sovereign debt,” People’s Bank of China Governor Zhou Xiaochuan said in a speech in Beijing today. “We would participate in resolving the euro-debt crisis,” he said, echoing comments by Premier Wen Jiabao yesterday.

Euro-area finance ministers canceled a Brussels meeting scheduled for today and will hold a teleconference instead to prod Greece to do more to obtain 130 billion euros ($170 billion) of aid along with about 100 billion euros of debt relief from private bondholders. Greece needs the aid to make a 14.5 billion-euro bond payment on March 20.

The FTSE 100 erased a gain of 0.4 percent as Reuters reported that the euro area’s finance ministers may delay the bailout package until after Greece holds elections in April, citing European Union sources.

Antonis Samaras, the leader of Greece’s second-biggest political party, said he and his party New Democracy were committed to the implementation of terms and conditions for a second financing package for the country.

Stocks climbed even as U.K. jobless claims rose in January more than economists had forecast and unemployment held at the highest rate for 16 years in the fourth quarter as the economy contracted.

Unemployment Claims Increase

The number of people claiming jobless benefits rose by 6,900 to 1.6 million, the most since January 2010, the Office for National Statistics said today. The median of 24 forecasts in a Bloomberg Survey called for a gain of 3,000. U.K. unemployment measured by International Labour Organization methods rose by 48,000 to 2.67 million in the fourth quarter, leaving the rate at 8.4 percent, the most since 1996.

HSBC gained 2.6 percent to 575.9 pence and Barclays climbed 2.9 percent to 241.65 pence. The FTSE 350 Banks Index advanced 2.2 percent for its biggest rally since Feb. 3.

Morgan Crucible surged 8.3 percent to 354 pence after reporting net income of 73 million pounds ($115 million). That beat the average analyst estimate for profit of 70 million pounds.

Sports Direct International soared 5.8 percent to 278 pence as the sportswear retailer said it is “certain” of achieving its forecast for full-year earnings before interest, taxes, depreciation and amortization.

--With assistance from Tom Stoukas in Athens and Peter Levring in Copenhagen. Editors: Will Hadfield, Andrew Rummer

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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


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