U.K. Stocks Rise; Vodafone Gains on Network-Sharing Plan

U.K. stocks rose to their highest level since May 2008 as Vodafone Group Plc (VOD) climbed and Alcoa (AA) Inc. kicked off the U.S. earnings season by posting sales that beat estimates.

Vodafone rose 1.9 percent following a report that European telecommunications operators have discussed a regional mobile- phone network. Shire (SHP) Plc gained 2.3 percent as the company said it will meet its earlier guidance for full-year earnings growth. Aviva Plc (AV/) dropped 2.2 percent after selling its stake in Delta Lloyd NV for 433.8 million euros ($566 million).

The FTSE 100 added 45.02 points, or 0.7 percent, to 6,098.65 at the close in London, its highest level since May 22, 2008. The equity benchmark has jumped 3.4 percent so far this year as the U.S. Congress agreed on a compromise budget, avoiding automatic deficit-reduction measures. The broader FTSE All-Share Index rose 0.7 percent today, while Ireland’s ISEQ Index slipped 0.2 percent.

The number of shares changing hands in FTSE 100 companies today was 76 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

Alcoa, the largest U.S. aluminum producer, reported fourth- quarter sales of $5.9 billion, beating the $5.6 billion average of 11 estimates in a Bloomberg News survey.

Vodafone advanced 1.9 percent to 165.5 pence. The Financial Times reported that Deutsche Telekom AG, France Telecom SA, Telecom Italia SpA and Telefonica SA discussed a pan-European network with Competition Commissioner Joaquin Almunia during a private meeting. The newspaper cited several people familiar with the discussions.

Network Talks

“This can help them face the problem of competition and fight the price war,” said Arnaud Scarpaci, a fund manager at Montaigne Capital in Paris, which oversees $225 million. “It’s good news because the industry’s performance has been lagging.”

Shire increased 2.3 percent to 2,008 pence. Chief Executive Officer Angus Russell said that the Irish drugmaker increased earnings by at least 10 percent in 2012, confirming an Oct. 25 forecast. Russell addressed investors at JPMorgan Chase & Co.’s health-care conference in San Francisco.

“Shire is now increasingly confident of meeting current consensus earnings expectations for 2013,” the company added in a statement.

Meggitt Plc (MGGT) rallied 3.8 percent to 425 pence, rising to its highest price since at least September 1988. Bank of America Corp. raised the largest provider of wheels and brakes for combat aircraft to buy from neutral. The brokerage said that the outlook for Meggitt’s market has improved.

Aviva Slips

Aviva declined 2.2 percent to 373.7 pence after the U.K.’s second-biggest insurance company by market value said late yesterday that it sold its 19.4 percent stake in Delta Lloyd (DL) for 12.65 euros per share.

J Sainsbury Plc (SBRY) retreated 2.9 percent to 329.2 pence after the U.K.’s third-largest supermarket chain reported its slowest sales growth in eight years.

Sales at stores open at least a year rose 0.9 percent, excluding revenue from fuel, in the 14 weeks ended Jan. 5, London-based Sainsbury said in a statement. That was the weakest of 32 consecutive quarters of gains, even though it matched the median estimate of 11 analysts compiled by Bloomberg.

Centamin Plc (CEY) soared 13 percent to 49.98 pence after producing more gold than it had forecast. Full-year output of the precious metal rose 30 percent to 262,958 ounces, beating its guidance of 250,000 ounces, the company said.

Lloyds, Punch

Lloyds Banking Group Plc (LLOY) rallied 4.9 percent to 53.37 pence for the biggest gain on the FTSE 100. (UKX) UBS AG raised its recommendation on the shares of the U.K.’s largest mortgage lender to buy from neutral, citing its focus on earnings.

The U.K.’s domestic banks have improving growth and profitability prospects, UBS analysts wrote in the note.

Royal Bank of Scotland Group Plc (RBS) jumped 3.8 percent to 349.9 pence, while Barclays Plc (BARC) added 2.6 percent to 294.75 pence.

John Wood Group Plc (WG/) advanced 3.3 percent to 774 pence. Goldman Sachs Group Inc. added the oil-services company to its conviction-buy list.

Punch Taverns Plc (PUB) slipped 2.2 percent to 11.25 pence. Enterprise Inns Plc (ETI) lost 2.1 percent to 100.9 pence. U.K. Business Secretary Vince Cable may fine pub companies, the Telegraph reported. Cable announced a plan for an independent adjudicator that will penalize big pub owners if they exploit their tenants, the newspaper reported.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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