U.K. stocks advanced as the European Central Bank unexpectedly cut interest rates and Greek Prime Minister George Papandreou signaled he won’t call a referendum on the country’s latest bailout package.
Barclays Plc (BARC) rallied 1.9 percent as financial shares gained following a 25 basis point cut in the ECB’s benchmark interest rate. Man Group Plc (EMG) rose 2.4 percent as the largest publicly traded hedge-fund manager reported a smaller-than-forecast decline in profit.
The FTSE 100 Index (UKX) climbed 61.54, or 1.1 percent, to 5,545.64 at the close in London, a second day of gains. The gauge has still retreated 2.8 percent this week. The FTSE All- Share Index rose 1.1 percent today, and Ireland’s ISEQ advanced 2.8 percent.
“Moving rates from 1.5 percent to 1.25 percent isn’t going to move the needle for a region that is suffering from structural economic stagnation and too much debt,” Peter Boockvar, an equity strategist at Miller Tabak & Co. in New York, wrote in e-mailed comments. “Psychologically though, markets love it.”
The FTSE 100 has fallen 6 percent this year as Europe’s sovereign-debt crisis threatened to spread. The U.K. is still the best performing equity market in western Europe, except for Iceland, as investors favored companies that are less dependent on the region for sales.
Papandreou signaled he won’t call a referendum on the euro- region bailout package as it may call into question Greece’s membership of the currency bloc. He said he will reach out to the opposition about forming a transitional government.
Pressure has mounted on Papandreou after he announced a vote on the rescue deal on Oct. 31. German and French leaders yesterday withheld 8 billion euros ($11 billion) of assistance and warned Greece it will surrender all European aid if it votes against the plans agreed upon only last week.
The ECB cut interest rates today at President Mario Draghi’s first meeting in charge, lowering the benchmark interest rate by 25 basis points to 1.25 percent. The move confounded 51 of 55 economists in a Bloomberg News survey.
Barclays, the U.K.’s second-largest bank by assets, rose 1.9 percent to 184.55 pence.
Man Group climbed 2.4 percent to 144.7 pence. The hedge- fund manager reported a smaller-than-forecast decline in pretax profit in the fiscal first half as the European debt crisis roiled markets.The company said it will buy back $150 million of shares by the end of the year.
BT Group Plc (BT/A) gained 2.8 percent to 192.7 pence as the U.K.’s largest Internet service provider reported second-quarter operating profit that beat analysts’ estimates, helped by its Global Services unit and more broadband subscribers.
Tate & Lyle Plc (TATE) rallied 5.2 percent to 680.5 pence after the maker of low-calorie sweetener Splenda said fiscal first- half earnings beat estimates. Adjusted operating profit added 19 percent to 194 million pounds ($311 million), beating the average projection of 188 million pounds from six analysts surveyed by Bloomberg.
Cable & Wireless Communications Plc (CWC) surged 7.8 percent to 39.33 pence as growth at the U.K. phone company’s Caribbean and Macau units pushed increases in fiscal first-half sales and earnings.
ITV Plc (ITV) rose 5.9 percent to 65.1 pence as Germany’s biggest private broadcaster, ProSiebenSat.1 Media AG, reported third- quarter profit that topped analysts’ estimates on advertising revenue and licensing income from the sale of television shows abroad.
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