June 21 (Bloomberg) -- U.K. stocks posted their biggest rally in two months amid speculation that Greek Prime Minister George Papandreou will win a confidence vote that moves the nation a step closer to avoiding a default.
Whitbread Plc surged 6.9 percent, the best performer in the benchmark FTSE 100 Index, after reporting an increase in sales. BP Plc rallied 3.7 percent, the most in five months, after Weatherford International Ltd. agreed to pay the oil company $75 million for its part in last year’s Gulf of Mexico spill. Misys Plc jumped 9 percent after saying it received a takeover approach.
The FTSE 100 climbed 81.92, or 1.4 percent, to 5,775.31 at the 4:30 p.m. close in London, its biggest rally since April 20. The gauge has still fallen 4.1 percent from this year’s highest close on Feb. 8, as investors speculated that Greece will default on its debt. The FTSE All-Share Index also rose 1.4 percent today, while Ireland’s ISEQ Index gained 1.7 percent.
“Our house view is that the vote tonight gets passed,” Jonathan Stubbs, an equity strategist at Citigroup Inc., told clients at a presentation in London. “Second-half performance for the market will be relatively strong” for stocks.
Tonight’s confidence vote for Papandreou may determine whether Greece becomes the first euro-area country to default. The vote caps a week of turmoil for the Greek prime minster, who has fended off a revolt from the ranks of his ruling Pasok party. European Union leaders have insisted that Papandreou secure multiparty support for austerity measures that are a condition of the aid.
Treated as Default
Standard & Poor’s reaffirmed its view that it would probably treat a voluntary debt restructuring for Greece as a default, Moritz Kraemer, its head of European sovereign ratings told newspaper Die Welt.
Whitbread surged 6.9 percent to 1,587 pence, its largest advance since September 2009, as the owner of Premier Inn hotels and Costa Coffee shops said total sales rose 9.2 percent in the 13 weeks ending June 2 and the first quarter was consistent with its outlook.
BP soared 3.7 percent to 445.7 pence. The agreement is the second reached by London-based BP in a month with one of its partners or contractors on the Macondo oil well. Geneva-based Weatherford provided flow-control equipment used when the well in the Gulf of Mexico exploded. BP will add the payment to a $20 billion trust for claims stemming from the world’s largest accidental oil spill.
Misys, Rio Tinto
Misys jumped 9 percent to 418.9 pence after the U.K. provider of software for the financial services industry said it has received a “preliminary” approach that “may or may not lead to an offer being made for the company.”
Rio Tinto Group and Xstrata Plc rose with metal prices. Rio Tinto, the second-biggest mining company, climbed 3 percent to 4,218 pence, while Xstrata, the largest exporter of thermal coal, advanced 2.2 percent to 1,285 pence. Copper, nickel, tin and zinc all climbed on the London Metal Exchange.
Petropavlovsk Plc surged 7.6 percent to 729.5 pence after the producer of gold in Russia increased sales of the precious metal by 64 percent through the first five months of this year as prices gained.
Cable & Wireless Communications Plc gained 2.4 percent to 38.7 pence as UBS AG upgraded the the telecommunications company to “neutral” from “sell” at UBS.
Wolseley Plc rallied 4.3 percent to 1,965 pence as the supplier of heating and plumbing products was raised to “buy” from “hold” at ING Groep NV.
SABMiller Plc declined 3.6 percent to 2,103 pence. Foster’s Group Ltd., Australia’s biggest brewer, rejected a A$9.5 billion ($10 billion) cash offer from SABMiller as too low in what would be the biggest takeover in the beer industry since 2008.
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