U.K. Stocks Extend Six-Month High on U.S. Jobs Data; HSBC Climbs

U.K. stocks advanced for a fourth day, extending a six-month high for the benchmark FTSE 100 Index (UKX), as U.S. payrolls rose more than estimated and the unemployment rate fell to a three-year low.

HSBC Holdings Plc (HSBA) and Barclays Plc (BARC) led a rally among banks. Admiral Group Plc (ADM) soared 7.9 percent after extending some reinsurance partnerships. Hays Plc (HAS) climbed 7.3 percent as the Daily Mail reported that Adecco SA is considering a bid for the recruitment firm at 150 pence a share. BT Group Plc (BT/A) increased as the U.K.’s largest Internet service provider raised its full- year profit forecast.

The FTSE 100 rose 105, or 1.8 percent, to 5,901.07 in London. The gauge rallied 2.9 percent this week. The broader FTSE All-Share Index climbed 1.7 percent and Ireland’s ISEQ Index advanced 2.3 percent.

“These numbers are surprisingly strong,” said Espen Furnes, a fund manager at Storebrand Asset Management in Oslo, which oversees $60 billion. “This means that the recovery in the U.S. is not as fragile as feared.”

U.S. employers added 243,000 jobs in January, Labor Department figures showed. That was the most since April and exceeded all forecasts in a Bloomberg News survey. The unemployment rate dropped to 8.3 percent, the lowest since February 2009.

‘Stellar Numbers’

“This is a really stellar set of numbers and has surprised many who had expected a slowing of jobs growth after the December holiday period,” said Joshua Raymond, the chief market strategist at City Index Ltd. in London. “Not many had predicted U.S. jobs to be this strong at this stage.”

Stocks climbed this week as gauges of manufacturing from China to the U.S. and Britain rose. The FTSE 100 has rallied 19 percent from last year’s lowest level as the European Central Bank boosted lending to banks and U.S. economic reports exceeded estimates.

The U.K. Services Purchasing Managers’ Index (PMITSUK) climbed to 56 in January from 54 in December, Markit Economics and the Chartered Institute of Purchasing and Supply said today in London. A measure above 50 indicates expansion. The median forecast of 28 economists surveyed by Bloomberg was for a drop to 53.3.

HSBC, Europe’s largest bank, rose 2.5 percent to 559.5 pence and Barclays gained 4.2 percent to 237.45 pence.

Admiral jumped 7.9 percent to 1,038 pence, the biggest increase in three years. The company extended its reinsurance arrangements for cars until 2014.

Hays Gains

Hays advanced 7.3 percent to 85.75 pence. Adecco, the Swiss staffing-services firm, “could be lining up” a cash bid for the company, the Mail said, citing traders.

BT gained 3.9 percent to 214 pence, the biggest increase in a month. Full-year earnings before interest, taxes, depreciation, amortization, and costs from job cuts will exceed 6 billion pounds ($9.5 billion) in the 12 months through March 31, a year earlier than the London-based company forecast. Analysts surveyed by Bloomberg had estimated Ebitda of 5.97 billion pounds.

Tullow Oil Plc (TLW) added 1.5 percent to 1,462 pence after it signed two production-sharing agreements with the government of Uganda, the precursor to finalizing a proposed farmdown with Total SA and Cnooc Ltd.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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

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