U.K. Stocks Rally on U.S. Goods Orders; RBS, Glencore Advance

U.K. stocks climbed for a third day, led by a rally in banks and basic-resources companies, after U.S. durable-goods orders data helped eased concern that the world’s largest economy is slipping into recession.

Royal Bank of Scotland Group Plc jumped 9.4 percent and Glencore International Plc, the world’s largest listed commodities trader, surged 6 percent. WPP Plc advanced 7.4 percent after the world’s biggest advertising company reported better-than-estimated profit.

The FTSE 100 Index increased 76.43, or 1.5 percent, to 5,205.85 at the 4:30 p.m. close in London, after fluctuating between gains and losses more than 10 times. The gauge slumped 5.3 percent last week after European and U.S. reports trailed economists’ forecasts, adding to concern the global economy is at risk. The broader FTSE All-Share Index climbed 1.4 percent today, while Ireland’s ISEQ Index gained 1.3 percent.

“What we have seen is investors willing to cling to every ounce of positivity out there to buy stocks for fear of missing out,” said Giles Watts, head of equities at City Index in London. The U.S. data has “boosted near-term sentiment.”

A report today showed orders for U.S. durable goods climbed more than forecast in July as a surge in demand for aircraft and autos eclipsed a decrease in business equipment. A separate release showed U.S. home prices rose 0.9 percent in June from the prior month, the biggest gain since 2005.

Jackson Hole

Shares have also advanced this week amid speculation the Federal Reserve may announce further measures to boost the economy. Central bankers meet this weekend in Jackson Hole, Wyoming. At last year’s event, Fed Chairman Ben S. Bernanke hinted at a second round of asset purchases, spurring a 28 percent jump in the Standard & Poor’s 500 Index through April.

RBS led banks higher, surging 9.4 percent to 21.87 pence. Lloyds Banking Group Plc climbed 6.4 percent to 30.11 pence and Barclays Plc advanced 2.9 percent to 149.6 pence.

Glencore, which is scheduled to report first half results tomorrow, jumped 6 percent to 389.6 pence. Xstrata Plc, which is 34 percent owned by Glencore, rallied 5.2 percent to 986.5 pence.

BHP Billiton Ltd. advanced 2.3 percent to 1,932.5 pence as the world’s largest mining company reported a record second-half profit of $13.1 billion, beating analyst estimates.

The company’s Chief Executive Officer Marius Kloppers said it has capacity on its balance sheet for opportunistic mergers and acquisitions and may target copper, energy and potash.

WPP Gains

WPP rallied 7.4 percent to 623 pence after reporting first-half profit of 517.9 million pounds ($853 million) on growth in Asia and Latin America. That beat the 512.6 million-pound average analyst estimate.

Man Group Plc surged 10 percent to 216.1 pence, making it the biggest gainer on the FTSE 100. HSBC Holdings Plc today raised its recommendation for the hedge-fund manager to “overweight” from “underweight,” citing a “stellar performance” from the AHL Diversified Plc computer-driven investment program since the end of June.

Tullow Oil Plc soared 8.4 percent to 1,026 pence after the energy producer said first-half net income more than tripled to $330 million as oil production from Ghana boosted revenue. The company also doubled its interim dividend to 4 pence a share and announced plans to invest at least $4 billion, with its partners, to develop new oil fields off Ghana’s Atlantic coast.

Admiral Sinks

Admiral Group Plc tumbled 12 percent to 1,353 pence, its biggest drop since 2008. The U.K. car insurer that owns the Confused.com website posted first-half pretax profit that missed analyst estimates after it held back more cash to cover claims from previous years.

Investec Securities reiterated its “sell” recommendation for the shares, saying they are “too expensive.”

Serco Group Plc fell 4 percent to 511 pence even after first-half profit increased. The operator of London’s Docklands Light Railway said the “U.S. federal market faces new risk of further delays” and the “impact of austerity measures in the U.K. may also continue.”

“The net impact of Serco’s results today will be to prompt some lower expectation of full-year organic growth,” David Brockton, an analyst at Banco Espirito Santo SA, wrote in a report.

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