Feb. 20 (Bloomberg) -- U.K. stocks rose to a seven-month high as China cut banks’ reserve requirements to spur growth and euro-area finance ministers met to discuss a Greek bailout.
Rio Tinto Group and BHP Billiton Ltd. advanced more than 2 percent as China’s decision boosted demand for base metals. CSR Plc, the U.K. maker of chips used in Nokia Oyj mobile phones, jumped 21 percent after reporting a narrower-than-estimated loss. Misys Plc soared 6.6 percent after attracting a bid from Vista Equity Partners.
The benchmark FTSE 100 Index gained 40.18, or 0.7 percent, to 5,945.25 at the close in London, the highest level since July 8. The gauge has advanced 20 percent from its low in October as the European Central Bank increased lending to banks and U.S. economic reports exceeded estimates. The FTSE All-Share Index also rose 0.7 percent today and Ireland’s ISEQ Index advanced 0.9 percent.
“The Chinese central bank cutting reserve requirements for China’s banks has fueled speculation that this will help industrial production, boosting U.K. commodity shares,” said David Jones, the chief market strategist at IG Index in London. “Although we can all be allowed a degree of skepticism regarding an imminent solution to the Greek bailout, investors still seem happy to look for excuses to buy, and stock markets still seem to have plenty of momentum, even considering how far they have come in recent months.”
The FTSE 100 tumbled 19 percent from last year’s highest level in February through October, when it reached 4,944.44, the lowest level since July 2010, as the debt crisis engulfed the larger euro zone economies of Italy and Spain.
China cut the amount of cash that banks must set aside as reserves for the second time in three months to spur lending. Reserve requirements will fall by 50 basis points effective Feb. 24, the People’s Bank of China said.
Euro-area finance ministers began meeting in Brussels today to prevent the region’s first sovereign default through a bailout for Greece. They joined Greek Prime Minister Lucas Papademos who arrived on the eve of the gathering. The talks are seeking to reconcile demands made on Greek leaders, a debt swap among private creditors, the role of the European Central Bank and concerns the measures won’t be enough to contain the crisis.
Rio Tinto, the world’s third-largest mining company, advanced 2.3 percent to 3,706 pence. BHP Billiton rose 2.7 percent to 2,077.5 pence. Copper, lead, nickel and tin prices increased on the London Metal Exchange.
CSR rallied 21 percent to 275 pence, the largest gain since 2004, after also announcing a buyback of as much as $50 million. Chief Executive Officer Joep van Beurden said he’s “comfortable” with analysts’ earnings estimates for 2012.
Misys, the financial-software maker that agreed to merge with Swiss competitor Temenos Group AG this month, rose 6.6 percent to 330.1 pence. Misys received a non-binding proposal from Vista to acquire all outstanding shares in cash, Misys said today.
Cove Energy Plc advanced 5.2 percent to 156.75 pence. Bids for the London-based oil and gas explorer which put itself up for sale last month will be led by India’s state-owned Oil & Natural Gas Corp. and GAIL India Ltd., the Sunday Times reported, without saying where it got the information.
ONGC and GAIL have appointed Bank of America Merrill Lynch to advise them on a joint bid, the newspaper said. State-backed firms from Thailand, South Korea and China are also interested, according to the newspaper.
Cable & Wireless Worldwide Plc advanced 2.5 percent to 27.82 pence. The Sunday Times reported that Vodafone Group Plc may have to offer at least 1 billion pounds ($1.6 billion) for the wireless services provider.
IP Group Plc rallied 12 percent to 113 pence. Oxford Nanopore Technologies Ltd. is entering the gene-sequencing race with a new portable device that will allow people to analyze DNA on the go. IP Group owns 21.5 percent of Oxford Nanopore.
JJB Sports Plc jumped 15 percent to 11.5 pence as the retailer’s comparative sales and cash gross margin improved.
--Editors: Andrew Rummer, Srinivasan Sivabalan
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