U.K. stocks rose the most in more than two months, following the FTSE 100 Index (UKX)’s longest streak of weekly losses since 2008, after a report showed euro-area factory output grew faster than economists had forecast.
Aggreko Plc (AGK) surged 8.5 percent, the largest gain in the equity benchmark, after saying full-year results will beat estimates. CRH Plc (CRH) climbed the most in seven months in Dublin after Bank of America Corp. raised its rating on the Irish building-materials company. RSA Insurance Group Plc (RSA) slipped 2.6 percent, retreating for a seventh consecutive day.
The FTSE 100 advanced 82.24 points, or 1.3 percent, to 6,522.2 at the close of London trading as all but 10 of the 101 stocks on the index increased. The gauge fell 4.4 percent in the six weeks through Dec. 13. The broader FTSE All-Share Index added 1.2 percent today, while Ireland’s ISEQ Index increased 0.9 percent.
“It’s a Santa rally,” said Gerard Lane, a strategist at Shore Capital Group Ltd., in Liverpool, England. “The selling herd had brought down the market too hard too fast last week.”
Euro-area factory output rose to 52.7 in December, a 31-month high, from 51.6 in November, according to a report from Markit Economics. That beat the median estimate in a Bloomberg survey of 51.9. The gauge has exceeded 50, meaning that activity has expanded, for six months.
Ireland yesterday became the first euro-zone country to leave a bailout program and fully return to debt markets. The government’s debt stood at 117 percent of gross domestic product at the end of last year, according to data compiled by Bloomberg. The budget deficit was 8.2 percent.
The Federal Reserve starts a two-day meeting tomorrow to decide whether to slow the pace of its asset-buying program. Thirty-four percent of economists expect the Fed to begin reducing its $85 billion of monthly bond purchases, a Bloomberg survey found on Dec. 6. That is up from 17 percent in November.
Aggreko surged 8.5 percent to 1,645 pence, its biggest gain in more than nine months. The company said net debt will drop by 200 million pounds ($326 million) this year. It also announced contracts to provide temporary power to the FIFA World Cup in Brazil and the Commonwealth Games in Glasgow next year.
CRH rose 4.6 percent to 17.62 euros. Bank of America upgraded the company to neutral, similar to a hold rating, from underweight. The brokerage cited improving prospects in the U.S., Poland, Belgium and the Netherlands, and the potential for restructuring by the new chief executive officer.
Royal Bank of Scotland Group Plc (RBS) increased 1.5 percent to 320.6 pence. A gauge of lenders made the biggest contribution to the Stoxx Europe 600 Index’s advance.
Rolls-Royce Holdings Plc (RR/) gained 2.7 percent to 1,236 pence after winning a $57.1 million engine-services contract. The world’s second-largest maker of commercial jet engines was also raised to neutral from sell at Banco Espirito Santo SA.
RSA dropped 2.6 percent to 90.1 pence. The stock tumbled to its lowest price in more than eight years on Dec. 13 after saying its CEO had resigned. The insurer also forecast a decline in profit and said it will need to increase the reserves of its Irish business, threatening the dividend.
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