U.K. stocks climbed for a third day as Japan made progress in cooling nuclear reactors that were damaged during the March 11 earthquake and tsunami and investors speculated declines in equities were overdone.
Vodafone Group Plc and BT Group Plc rallied more than 2 percent after AT&T Inc. agreed to buy T-Mobile USA from Deutsche Telekom AG for about $39 billion in cash and stock to create America’s largest mobile-phone company. Weir Group Plc advanced 4.5 percent as Credit Suisse Group AG advised buying the shares.
The benchmark FTSE 100 Index gained 67.96, or 1.2 percent, to 5,786.09 at the 4:30 p.m. close of trading in London. The FTSE All-Share Index also rose 1.2 percent and Ireland’s ISEQ Index climbed 1.3 percent.
Even after three days of gains, the FTSE 100 is still 5 percent lower than this year’s high on Feb. 8. The gauge has declined as political unrest in the Middle East and North Africa sent oil prices surging and Japan battled to stop its Fukushima Dai-Ichi nuclear power plant from leaking radiation following the earthquake.
“We find the backdrop for stocks still constructive,” said Mislav Matejka, the London-based head of European equity strategy at JPMorgan Chase & Co. “The tragic Japanese natural disaster should not hurt activity sustainably, and global real GDP growth will be above trend in the first half of the year even with the recent move up in oil prices on the back of geopolitical unrest.”
Libyan No-Fly Zone
The U.S., U.K. and France began imposing a no-fly zone over Libya this weekend. Allied officials said air and missile strikes have effectively grounded Muammar Qaddafi’s air force.
Vodafone climbed 3.6 percent to 176 pence and BT gained 2.4 percent to 181.4 pence. Telecom companies led gains in European shares today after the announcement of AT&T’s acquisition, the largest in the wireless industry since 2004.
Weir gained 4.5 percent to 1,708 pence as Credit Suisse upgraded the Glasgow-based engineering company to “outperform” from “neutral.”
Punch Taverns Plc rallied 6.7 percent to 73.55 pence. The U.K.’s largest pub owner may be split into two with the Spirit division spun off to manage pubs, the Sunday Times said, without saying where it got the information.
Regus Plc surged 16 percent to 116.6 pence as the world’s largest operator of serviced offices reported earnings before interest and tax that topped consensus estimates.
Essar Energy Plc slid 7.3 percent to 440.4 pence as the Indian oil refiner and power plant operator said it incurred delays in gaining approval for the development of some domestic coal blocks.