U.K. Stocks Gain as Chinese Manufacturing Beats Estimates

U.K. stocks advanced, rebounding from yesterday’s decline, as commodity producers climbed after a measure of Chinese manufacturing exceeded estimates.

Aberdeen Asset Management Plc (ADN) rallied 6.7 percent after saying it will generate greater cost savings from its acquisition of Scottish Widows Investment Partnership than it had expected. Babcock International Group Plc gained 3 percent after London Fire Brigade named the company as the preferred bidder to manage its vehicle fleet. ICAP Plc (IAP) rose 2.6 percent after saying full-year profit will meet analysts’ estimates.

The FTSE 100 Index (UKX) added 54.24 points, or 0.8 percent, to 6,652.61 at the close of trading in London as a report confirmed that euro-area manufacturing expanded last month. U.K. equities lost 3.1 percent in March as Russia’s annexation of Crimea prompted the U.S. and the European Union to impose sanctions on officials connected to President Vladimir Putin’s government. The broader FTSE All-Share Index also climbed 0.8 percent today, while Ireland’s ISEQ Index added 1.7 percent.

“The positives here are that regionally -- excluding Germany -- the manufacturing PMI data appears to indicate that the euro-zone economy is on track,” said Jeremy Batstone-Carr, head of research at Charles Stanley & Co. in London. “This data purports to show the euro-zone economy moving in the right direction and that’s what investors want to see.”

Markit Economics Ltd.’s purchasing managers’ index for the 18-nation euro area dropped to 53 in March, matching the median estimate of economists surveyed by Bloomberg News. Readings greater than 50 mean that activity expanded.

Manufacturing Activity

A measure of manufacturing growth in Germany, Europe’s largest economy, slowed to 53.7 last month, missing the median estimate of 53.8 in a Bloomberg News survey. The PMI for U.K. manufacturing declined to 55.3 last month from a revised 56.2 in February, according to Markit.

In China, the National Bureau of Statistics’ PMI for manufacturing in the world’s second-largest economy climbed to 50.3 in March, beating the median economist estimate of 50.1. An index of U.K.-listed mining companies advanced 1 percent as BHP Billiton Ltd. and Rio Tinto Group, the world’s two-biggest commodity producers, gained 2.1 percent to 1,882 pence and 1.1 percent to 3,375 pence, respectively.

Aberdeen jumped 6.7 percent to 416.5 pence after Europe’s largest publicly traded money manager unveiled further measures to cut costs. The fund manager also announced that it attracted 1.2 billion pounds ($2 billion) in new funds in March.

Babcock Climbs

Babcock rose 3 percent to 1,387 pence. The fire-and-rescue service named the engineering-services company as preferred bidder on the 21-year contract to manage its fleet of 500 vehicles and 50,000 pieces of specialized equipment. The fire brigade will wait 10 days before awarding the contract.

Separately, Panmure Gordon & Co. upgraded the shares to buy from hold. The brokerage cited Babcock’s conditional agreement to acquire Avincis Group and the company’s status as preferred bidder to take ownership of Magnox Ltd. in a joint venture with Fluor Corp.

ICAP advanced 2.6 percent to 387.5 pence. The world’s biggest broker of transactions between banks predicted that profit in the 12 months through March will fall within the 266 million-pound to 280 million-pound range of estimates that the company has compiled. ICAP reports its earnings on May 14.

Weir Group Plc fell 0.7 percent to 2,518 pence as Metso Oyj said that it has received an unsolicited approach from the maker of pressure pumps. The Finnish company, which builds rock-crushing machines, said it would consider the unsolicited approach from Weir. “Contrary to market rumors, Metso is currently not and has not been in discussions with Weir,” the Helsinki-based company said in a statement.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Will Hadfield

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.