U.K. Stocks Rise on Italy Debt Auction, U.S. Data

U.K. stocks rose the most in a week as Italy met its maximum target for debt sales in an auction and orders for U.S. durable goods excluding transportation equipment increased more than estimated in January.

Vodafone Group Plc (VOD) gained the most in a month after it was said to put on hold its takeover approach for Kabel Deutschland Holding AG. Weir Group Plc (WEIR) rallied to the highest level in 23 years after saying it will increase the dividend in 2013. Petrofac Ltd. (PFC) fell 6.3 percent after posting full-year sales that missed analyst estimates.

The FTSE 100 Index (UKX) rose 55.44 points, or 0.9 percent, to 6,325.88 at the close in London, the most since Feb. 19. The equity benchmark tumbled 1.3 percent yesterday as Italy’s inconclusive polls fueled concern the euro-area debt crisis will worsen. The gauge has rallied 7.3 percent so far this year. The broader FTSE All-Share Index climbed 1 percent today, while Ireland’s ISEQ Index lost 0.3 percent.

“The Italian auction shows that the reassurance provided by the European Central Bank continues to hold firm,” said Guy Foster, head of portfolio strategy at Brewin Dolphin Ltd. in London. “There’s a new wall of worry for investors to climb after Italy’s elections, and the country’s access to the bond market is the first step.”

Italy sold 6.5 billion euros of debt today, meeting its maximum target, as borrowing costs rose after the country’s election results. The Treasury in Rome sold 4 billion euros ($5.2 billion) of a new 10-year bond at 4.83 percent, up from 4.17 percent at an auction of similar maturity debt on Jan. 30. It also sold 2.5 billion euros of a 5-year note due in 2017 to yield 3.59 percent, compared with 2.94 percent last month.

Durable Goods

Orders for U.S. durable goods excluding transportation gear climbed in January by the most in 13 months, a report showed.

Bookings for equipment meant to last at least three years, excluding demand for aircraft and some other goods, climbed 1.9 percent, the most since December 2011, Commerce Department data showed. That exceeded the 0.2 percent median forecast of economists surveyed by Bloomberg.

In the U.K., the economy contracted in the fourth quarter, a report from the Office for National Statistics showed. Gross domestic product dropped 0.3 percent from the three months through September, when it fell 0.3 percent. The latest figure matched the average economist projection in a Bloomberg survey.

Quantitative Easing

Bank of England policy maker Paul Fisher said he favors a more prolonged period of asset purchases at a slower pace, as he explained his decision to vote for 25 billion pounds of additional quantitative easing this month.

“If we were to do that, then it would be straightforward to accelerate or to stop purchases as the economic outlook developed and the risks became clearer,” he said in a speech yesterday after BOE officials testified at a Parliament hearing in London.

At the hearing, Deputy Governor Paul Tucker said he has raised the topic of negative interest rates at Monetary Policy Committee meetings.

Vodafone rose 2 percent to 165.1 pence as three people familiar with the matter said the wireless carrier no longer has a time frame for an approach for Kabel Deutschland after leaks on a potential offer complicated internal discussions. Vodafone planned to contact Kabel Deutschland after the German cable provider reported earnings last week.

Weir Group jumped 7.3 percent to 2,322 pence, the highest level since at least 1989, after the company said in a statement it sees “double-digit” dividend growth and increased cash generation in 2013.

Bwin.Party Digital Entertainment Plc (BPTY) jumped 8.9 percent to 150 pence and 888 Holdings Plc (888) surged 4.3 percent to 156.75 pence. The British betting companies rallied after New Jersey Governor Chris Christie signed legislation authorizing online gambling in his state, in a bid to boost revenue at Atlantic city casinos.

Petrofac declined 100 pence to 1,497 pence. The oil-and-gas engineering company posted full-year revenue of $6.3 billion, missing the average analyst estimate of $6.44 billion according to a Bloomberg survey.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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

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