U.K. Stocks Advance After U.S. Data; BT Group Jumps

U.K. stocks advanced, with the FTSE 100 (UKX) Index posting a fifth straight weekly gain, as data showed hiring and manufacturing expanded in the U.S. in January.

BT Group Plc (BT/A) jumped to the highest in five years after the U.K.’s biggest Internet service provider posted earnings that beat analyst estimates. Diageo Plc (DGE) advanced 1.6 percent after analysts raised their share-price forecasts. Afren Plc soared 7.4 percent after people with knowledge of the matter said China Petrochemical Corp. is in talks to buy more than $1 billion of assets from the company.

The FTSE 100 advanced 70.36 points, or 1.1 percent, to 6,347.24 in London. The gauge closed with a 1 percent increase this week. The equity benchmark yesterday completed its eighth straight monthly gain. The broader FTSE All-Share Index climbed 1.2 percent today, while Ireland’s ISEQ Index rose 0.8 percent.

“While the U.S. payrolls figure came in a bit below expectations, it was still reasonably strong,” said Simon Reynolds, who helps manage 2.9 billion pounds as fund manager at Octopus Investments Ltd. in London. “There’s a lot of positive sentiment in the market. As long as it’s not bad news, the sentiment’s driving markets upwards.”

A Labor Department release in Washington showed payrolls rose 157,000 in January following a revised 196,000 advance in the prior month and a 247,000 surge in November. The revisions added a total of 127,000 jobs to the employment count in November and December. The jobless rate increased to 7.9 percent from 7.8 percent.

U.S. Manufacturing

The Institute for Supply Management’s U.S. factory index rose to 53.1 in January from 50.2 a month earlier, the Tempe, Arizona-based group said. Economists in a Bloomberg survey projected a reading of 50.7 for last month, according to the median of 86 forecasts. The dividing line between expansion and contraction is 50.

U.K. manufacturing expanded for a second month in January, a report showed. A gauge of factory activity slipped to 50.8, compared with a revised 51.2 in December, Markit Economics and the Chartered Institute of Purchasing and Supply said in London today. The median forecast of 29 economists in a Bloomberg News survey was for a decline to 51 from an initially reported 51.4. A reading above 50 indicates expansion.

BT Earnings

BT rallied 6.5 percent to 264.80 pence, its highest price since Jan. 18, 2008. The company posted third-quarter adjusted earnings before interest, taxes, depreciation and amortization of 1.55 billion pounds ($2.5 billion). That compared with the average analyst estimate for profit of 1.53 billion pounds.

Diageo, the world’s largest distiller, climbed 1.6 percent to 1,906 pence. Exane BNP Paribas increased the share-price forecast by 2 percent to 1,980 pence. Raymond James Financial Inc. reiterated its outperform rating, similar to a buy recommendation, and increased the price target 5.6 percent to 2,060 pence.

Afren surged 7.4 percent to 154 pence, its highest level since July 14, 2011. China Petrochemical, the country’s largest refiner, is in talks to buy more than $1 billion of assets from Afren, (AFR) people with knowledge of the matter said. Sinopec Group, as China Petrochemical is known, is interested in Afren assets including those in Nigeria, one of the people said, asking not to be identified as the information is private.

Qinetiq Group Plc (QQ/) jumped 5.1 percent to 197.6 pence, the biggest increase in more than four months. The technology company formed from the British government’s defense research establishment, said it has completed a five-yearly review of its long-term partnering agreement with the U.K. Ministry of Defence. The ministry will pay the firm 998 million pounds in the next five years, Qinetiq said.

Platinum Price

Aquarius Platinum Ltd. (AQP) surged 12 percent to 70.50 pence for the best performance on the FTSE All-Share gauge as the price of platinum rose in London after the U.S. payrolls data.

Rentokil Initial Plc (RTO), the world’s largest pest-control company, rallied 2.8 percent to 91.75 pence. RBS Capital Markets LLC raised its recommendation on the stock to outperform from sector perform after the shares declined 6.8 percent last month.

Tate & Lyle (TATE) Plc slid 1.1 percent to 804 pence. The maker of low-calorie sweetener Splenda said that adjusted pretax profit was lower than a year earlier as a result of a change in fixed costs.

The volume of shares changing hands on the FTSE 100 was 18 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

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

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