U.K. Stocks Advance for Second Day on Italy Debt-Reduction Plan
U.K. stocks advanced, extending the biggest weekly increase in almost three years, as Italian Prime Minister Mario Monti introduced a debt-reduction plan and Germany and France pushed for closer economic cooperation.
Lloyds Banking Group Plc (LLOY) and Barclays Plc (BARC) led gains among lenders. Aberdeen Asset Management Plc rallied 3.8 percent as profit increased. Michael Page International Plc (MPI) plunged 5.2 percent after saying full-year earnings will miss analysts’ estimates.
The benchmark FTSE 100 (UKX) Index gained 15.67, or 0.3 percent, to 5,567.96 at the close in London. The benchmark gauge last week posted its biggest increase since January 2009, as the U.S. unemployment rate fell and Germany and France pushed for greater fiscal union in the euro area. The FTSE All-Share Index added 0.3 percent today, while Ireland’s ISEQ Index increased 1.6 percent.
“Markets are gaining ground as investors acknowledge reports out of Italy surrounding tough new austerity measures,” Harley Salt, head of sales trading at IG Markets in London, wrote in a note.
Monti presented the debt-reduction plan to the Chamber of Deputies in Rome today after his Cabinet approved the package yesterday. The measures include more than 12 billion euros ($16 billion) in spending cuts, will force workers to delay retirement, resurrect a tax on first homes, crack down on tax evasion and aim to open up closed professions.
German Chancellor Angela Merkel met French President Nicolas Sarkozy to advance a plan for stricter enforcement of the region’s budget-deficit rules. They want to have a new treaty that would impose stricter budget limits agreed among all euro-area countries by March, Sarkozy said.
With a European Union summit in Brussels looming Dec. 9, U.S. Treasury Secretary Timothy Geithner arrives in Frankfurt tomorrow to prod political leaders and the European Central Bank holds a policy meeting Dec. 8.
Stocks pared gains after the Institute for Supply Management’s non-manufacturing index in the U.S. fell to 52 in November, missing economists’ estimates for an increase.
A gauge of European banks rose 2.5 percent for the biggest gain among the 19 industry groups in the Stoxx Europe 600 Index. A measure of British banks advanced 1.4 percent.
Lloyds jumped 6.3 percent to 27 pence. Royal Bank of Scotland Group Plc (RBS) advanced 5.3 percent to 22.77 pence.
Aberdeen Asset Management rallied 3.8 percent to 211.20 pence. Scotland’s largest money manager said fiscal full-year profit surged as revenue rose faster than costs and it sold more higher-margin products. Earnings before one-time items in the year ended Sept. 30 rose to 241.7 million pounds ($378.2 million), beating analyst estimates.
Pace Plc (PIC), the world’s biggest maker of television set-top boxes, jumped 19 percent to 67.90 pence, extending last week’s 28 percent gain. The shares were raised to “hold” from “reduce” at Numis Securities Ltd.
Michael Page, a recruitment services company, tumbled 5.2 percent to 345.90 pence. The company said full-year pretax profit will miss analyst forecasts.
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