U.K. Stocks Climb Most in Three Weeks; BHP Billiton, ARM Advance

U.K. stocks gained the most in three weeks as BHP Billiton Ltd. (BHP) rallied after reporting increased iron-ore output and Apple Inc.’s better-than-estimated earnings boosted ARM Holdings Plc. (ARM)

BHP Billiton, the world’s largest mining company, rose 1.7 percent. ARM, the designer of chips for Apple products, advanced 4.9 percent after the Cupertino, California-based company reported record sales of iPhones and iPads.

The benchmark FTSE 100 Index (UKX) climbed 63.83, or 1.1 percent, to 5,853.82 at the 4:30 p.m. close in London, the biggest gain since June 30. The gauge has still fallen 3.9 percent from this year’s high in February amid speculation that Europe’s widening debt crisis will derail the economic recovery. The broader FTSE All-Share Index gained 1.1 percent today while Ireland’s ISEQ Index advanced 0.9 percent.

“U.S. corporations are coming through with good earnings, and no one’s come out and said the second half is going to be disastrous,” said David Morrison, market strategist at GFT Global in London. “I also think they’re reacting to the positive noises that came out yesterday indicating they’re closer to some sort of agreement” on extending the U.S. debt ceiling.

Yesterday President Barack Obama praised a bipartisan $3.7 trillion debt-cutting plan, offering a sign that lawmakers are moving toward agreeing on proposals to raise the $14.3 trillion debt limit before an Aug. 2 deadline.

BHP, ARM

BHP Billiton advanced 1.7 percent to 2,364.5 pence as the company said fourth-quarter iron ore output rose 14 percent, driving an 11th straight annual production record.

ARM gained 4.9 percent to 611 pence, the biggest increase in two months. Apple’s expansion into China and other fast- growing economies helped make up for slower growth in the U.S. as it sold 20.3 million iPhones and 9.3 million iPads in the third quarter.

Imagination Technologies Group Plc (IMG), which also licenses chips for smartphones, soared 10 percent to 419 pence.

Banks led the FTSE 100 higher, with Lloyds Banking Group Plc climbing 4.1 percent to 44.91 pence, Barclays Plc (BARC) advancing 5.2 percent to 222.6 pence, Royal Bank of Scotland Group Plc gaining 3.1 percent to 34.11 pence and HSBC Holdings Plc (HSBA) increasing 2 percent to 605.5 pence.

EU Summit

European leaders are meeting in Brussels tomorrow to discuss measures to restore confidence in the euro region’s creditworthiness. Officials are considering steps previously rejected by Germany, including the use of precautionary credit lines and enabling the main 440 billion-euro ($624 billion) rescue fund to lend to recapitalize banks, according to a person close to the discussions who declined to be identified because the talks are in progress.

London Stock Exchange Group Plc (LSE) advanced 3.4 percent to 1,030 pence after it said fiscal first quarter sales rose 2 percent, helped by income from capital markets and information services.

Misys Plc (MSY), a financial software provider, advanced 7.8 percent to 411 pence after people with knowledge of the situation said it’s close to being acquired by Fidelity National Information Services Inc.

ITV Plc (ITV) gained 3.8 percent to 67.2 pence after analysts at UBS AG said it’s their most-preferred broadcaster, and the industry will rally when risk appetite returns.

To contact the reporter on this story: Conor Sullivan in London at csullivan39@bloomberg.net

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

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