U.K. Stocks Advance a Second Day After U.S. Manufacturing Report

U.K. stocks jumped for a second day, for the FTSE 100 (UKX) Index’s biggest two-day rally since January, as a report showed that manufacturing in the U.S. expanded last month at a faster pace than economists had estimated.

Rio Tinto Plc (RIO), the third-biggest mining company, advanced 3.2 percent and Fresnillo Plc (FRES) gained 4.1 percent as base metals increased. Cookson Group Plc (CKSN) rose 6 percent after a report that it plans to spin off its electronics unit.

The FTSE 100 added 1.9 percent to 5,874.89 at the close in London. The benchmark measure gained 3.5 percent in the first quarter. The gauge advanced on March 30 as the euro area’s finance ministers set the maximum lending capacity of the proposed European Stability Mechanism at 500 billion euros ($666 billion). The FTSE All-Share Index rose 1.7 percent today, while Ireland’s ISEQ Index gained 1.1 percent.

“Beginning today with the manufacturing numbers, U.S. data has the power to fuel the stocks rally beyond the first quarter,” said Jakup Petur Baerentsen, a chief equity adviser at Nordea Private Bank in Copenhagen. “Though, upside gains may be more limited than the downside risks if data disappoints.”

A U.S. report today showed that the country’s manufacturing expanded last month at a faster pace than economists had estimated. The Institute for Supply Management’s factory index climbed to 53.4 in March from 52.4 in February, the Tempe, Arizona-based group’s report showed today. Readings greater than 50 signal growth. The median forecast in a Bloomberg News survey called for a gain to 53.

Euro-Area Manufacturing

Euro-area manufacturing contracted for an eighth month in March, adding to signs that the economy of the 17 countries using the single currency continued to shrink in the first quarter. A manufacturing gauge, based on a survey of purchasing managers, fell to 47.7 last month from 49 in February, London- based Markit Economics said today.

A separate release from the European Union’s statistics office showed that unemployment in the euro region rose to 10.8 percent in February from 10.7 percent in January.

In China, a purchasing managers’ index compiled by the country’s logistics federation and the National Bureau of Statistics rose to 53.1 in March from 51 in February. The gauge, which was released yesterday, has a pattern of rising each March. By contrast, a PMI from HSBC Holdings Plc and Markit Economics fell to a four-month low of 48.3, showing that manufacturing contracted and export orders declined.

Lloyds, HSBC Slip

Investors in Greek bonds issued under foreign law rejected the nation’s attempts to restructure the debt at meetings held last week. In 20 out of 36 meetings, bondholders either turned down the government’s proposal, adjourned the talks or failed to achieve a quorum, according to a press release today from Greece’s Public Debt Management Office.

Mining companies rose as copper and nickel advanced on the London Metal Exchange. Rio Tinto rose 3.2 percent to 3,556 pence, while Fresnillo rose 4.1 percent to 1,664 pence. BHP Billiton Plc (BLT), the world’s biggest mining company, jumped 3 percent to 1,965 pence

Cookson surged 6 percent to 732.5 pence after the Sunday Times reported that the world’s biggest maker of ceramic linings for metal smelters plans to spin off its electronics unit. The newspaper did not say where it obtained the information. The company has hired Rothschild to help the unit sell shares and list on the London Stock Exchange, the Sunday Times reported.

Goals Soccer Centres Plc surged 16 percent to 125 pence, its biggest advance since 2004. The company said it has received a preliminary approach from Ontario Teachers’ Pension Plan that may or may not lead to an offer for the company.

SABMiller, ARM Holdings

SABMiller Plc, the second-biggest brewer, gained 3.7 percent to 2,602.5 pence as Sanford C. Bernstein & Co. said that the brewer is among the least-likely consumer-goods stocks to suffer from slower consumer spending in German, France and the U.K.

ARM Holdings Plc (ARM) gained 2.6 percent to 607.5 pence. The Sunday Telegraph reported that Vodafone Group Plc’s deputy chairman, John Buchanan, will resign from the mobile-phone operator to become chairman of ARM, which designs chips for Apple Inc.’s iPhone.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

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

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