U.K. stocks climbed, sending the FTSE 100 Index (UKX) to its biggest two-day rally since May, as the European Central Bank extended an emergency loan program and bought government bonds to stem the region’s debt crisis.
Rio Tinto Group (RIO) led mining companies higher as copper rose to a three-week high on better-than-forecast U.S. housing data. Kingfisher Plc jumped more than 7 percent after the retailer reported a smaller-than-estimated drop in sales at its B&Q shops. TUI Travel Plc (TT/) also rallied as the tour operator reported a pickup in winter booking volumes.
The FTSE 100 gained 2.2 percent to 5,767.56 at the 4:30 p.m. close in London, the biggest gain in three months and extending yesterday’s 2.1 percent rise. The gauge fell to a three-month low earlier this week after the European Union-led bailout of Ireland failed to convince investors that the debt crisis will not spread. The FTSE All-Share Index (ASX) added 2.2 percent today, while Ireland’s ISEQ Index (ISEQ) gained 2.1 percent.
“Confidence has finally taken a turn for the good as investors piled back into stocks,” said London-based Angus Campbell, head of sales at Capital Spreads. “Markets were boosted by the ECB who confirmed they would maintain the liquidity measures and will continue to buy government bonds.”
Speaking at a press conference in Frankfurt, ECB President Jean-Claude Trichet pledged to fight “acute” financial market tensions, adding that the central bank will offer banks unlimited loans through the first quarter over periods of seven days, one month and three months. As he spoke, ECB staff embarked upon a new wave of bond purchases, triggering a surge in Irish and Portuguese bonds.
Rio Tinto, Kingfisher
Rio Tinto, the world’s third-largest mining company, gained 4.9 percent to 4,415 pence as copper led base metals higher on the London Metal Exchange. BHP Billiton Ltd. rallied 3.7 percent to 2,450 pence and Xstrata Plc increased 2.6 percent to 1,403 pence.
Copper prices rallied after an index of pending U.S. home resales jumped a record 10 percent in October. The median forecast in a Bloomberg News survey called for 1 percent decrease in the gauge from the National Association of Realtors.
Separately, copper inventories monitored by the LME extended a slide to the lowest in almost 14 months.
African Barrick Gold Plc (ABG) gained 2.3 percent to 552 pence after the metal producer reported “high-grade success” at its North Mara project in Tanzania.
Kingfisher (KGF) jumped 7.2 percent to 254.9 pence. Europe’s largest home-improvement retailer said third-quarter sales at U.K. and Irish B&Q stores open at least a year fell 4.2 percent from the same period a year earlier, beating a company-compiled consensus estimate of a 7 percent decline.
TUI Travel climbed 7.3 percent to 230 pence after Europe’s largest tour operator reported a 27 percent increase in winter booking volumes from Oct. 21 to early December in Nordic countries, 2 percent in the U.K. and 9 percent in Germany.
Premier Foods Plc (PFD) jumped 12 percent to 18.56 pence after Sky News reported on its website that Nestle SA has bid for the company’s Quorn meat-free food range through its Osem Group venture. Sky didn’t say where it got the information.
Petrofac Ltd. (PFC) jumped 2.8 percent to 1,491 pence after Goldman Sachs Group Inc. raised its recommendation for the oil-services company to “buy” from “neutral.”
G4S Plc (GFS) rose 2 percent to 243.8 pence after BofA Merrill Lynch Global Research upgraded the security-services company to “buy” from “neutral.”
Desire Petroleum Plc soared 25 percent to 132.25 pence after the energy explorer said its Rachel North well off the Falkland Islands made the second discovery in the region this year. Rockhopper Exploration Plc (RKH) made the first potentially commercial find around the South American islands in May.
Britvic Plc paced declining shares, falling 2.9 percent to 476.2 pence after the maker of Robinson’s fruit drinks reported its first full-year loss in at least seven years on writedowns and restructuring charges at its Irish unit.
JJB Sports Plc plunged 18 percent to 4.74 pence after the sporting-goods retailer warned that poor sales would probably lead the company to breach some banking covenants.
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