U.K. Stocks Advance for a Third Day as ARM Holdings, BSkyB, Petrofac Rise

U.K. stocks climbed, extending the highest level for the FTSE 100 Index since June 2008, as shares of ARM Holdings Plc surged.

ARM jumped 9.1 percent after Microsoft Corp. was said to be preparing a version of Windows to run on the U.K. company’s chips for the first time. British Sky Broadcasting Group Plc rose 2 percent amid speculation that News Corp.’s takeover of the company will go ahead. Petrofac Ltd. climbed to a record after the oilfield services provider began work on the second phase of its $3.4 billion project in Turkmenistan.

The FTSE 100 gained 0.5 percent to 5,983.49 at the 4:30 p.m. close in London. The gauge has rallied 11 percent this year, boosted by higher company earnings, low interest rates and better-than-estimated U.S. economic data. The FTSE All-Share Index rose 0.5 percent today, while Ireland’s ISEQ Index slid 0.1 percent.

Stocks climbed even as the British economy slowed more than initially forecast in the third quarter after revisions to production, construction and business services. Gross domestic product rose 0.7 percent from the previous three months. That compares with the median analyst estimate of 0.8 percent.

“The FTSE seems determined to hit the 6,000 level before the year is out,” Manoj Ladwa, a London-based senior trader at ETX Capital, said. “Even a weak GDP number cannot keep the gauge in negative territory.”

New Operating System

ARM, which designs the semiconductors that power Apple Inc.’s iPhone, jumped 9.1 percent to 440.3 pence. Two people familiar with Microsoft’s plans said the world’s largest software maker will run a new version of the Windows operating system on ARM chips.

The new product will debut at the Consumer Electronics Show in January, said the people, who asked not to be identified because Microsoft’s plans are confidential. Microsoft will tailor the operating system for battery-powered devices, such as tablet computers and other handhelds, the people said.

BSkyB rallied 2 percent to 743 pence, the highest price since February 2004. U.K. Business Secretary Vince Cable was stripped of responsibility for media, broadcasting and telecommunications by the government after he was quoted as saying he had “declared war” on News Corp.’s Rupert Murdoch.

Cable had the power to decide if the acquisition of BSkyB by News Corp. would give Murdoch too much media power. News Corp., the owner of four of the biggest-selling U.K. newspapers, is waiting for the government to rule on the deal.

Petrofac rallied 1.5 percent to 1,580 pence after the company started work on a new phase of its South Yoloten project in Turkmenistan. The second part of the project should last more than two years and will bring gas exports to 20 billion cubic meters per annum, Petrofac said.

Northern Foods, Greencore

Northern Foods Plc jumped 4.1 percent to 63 pence as closely held Boparan Holdings Ltd. said it may make an offer for the maker of Fox’s biscuits, disrupting an all-stock merger with Greencore Group Plc. Boparan, the owner of the 2 Sisters Food Group, said it is at the preliminary stage of evaluating a possible cash offer for Northern Foods. Greencore’s shares dropped 4.5 percent to 1.27 euros in Dublin.

Mouchel Group Plc surged by a record 32 percent to 96.5 pence as the road and infrastructure-maintenance company said its board rejected an acquisition proposal by Costain Group Plc because it “significantly” undervalues the business. Costain slid 0.5 percent to 205 pence.

Carnival Plc gained 5.3 percent to 3,059 pence after Standard & Poor’s raised its recommendation for the world’s biggest cruise-line operator to “buy” from “hold.” Carnival yesterday forecast fiscal 2011 earnings that beat the average of analysts’ estimates.

Allied Irish Banks Plc dropped 5 percent to 40 euro cents in Dublin. Ireland’s second-largest bank was fined 2 million euros ($2.6 million) for failing to have “adequate internal control mechanisms to prevent and rectify frequent and many instances of overcharging,” the Irish central bank said in an e-mailed statement.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.