U.K. Stocks Rise; China’s Manufacturing Expands, BP Gains

U.K. stocks rose by the most in a month as manufacturing gauges climbed in China and the U.S., adding to optimism that growth in the world’s two largest economies will boost earnings.

BP Plc rallied 2.6 percent after a judge ruled that Europe’s second-biggest oil company doesn’t have to pay any punitive damages awarded against Halliburton Co. from the 2010 Gulf of Mexico oil spill. Johnson Matthey Plc surged to the highest since at least 1989 as the producer of a third of all autocatalysts reported increased profit.

The benchmark FTSE 100 Index added 109.11, or 1.9 percent, to 5,790.75 at the close in London. The gauge rose 2 percent in January for its second consecutive month of gains. The advance extended its rally from last year’s lowest level to 15 percent as the European Central Bank boosted lending to banks and U.S. economic reports exceeded estimates. The FTSE All-Share Index and Ireland’s ISEQ each climbed 2 percent today.

“The bulls were back in force today as strong manufacturing data worldwide indicated that not only might a double dip recession in the U.K. be averted, but a global recession as well,” said Angus Campbell, the head of sales at Capital Spreads in London. “With strong economic data indicating the recovery can be sustained now is proving a good time to buy stocks.”

China’s Manufacturing Expands

In China, the official purchasing managers’ index increased to 50.5 in January from 50.3 in December, exceeding the median estimate in a Bloomberg News survey for a reading below the 50 level that divides expansion from contraction. The data may have been distorted by a weeklong holiday. A separate gauge from HSBC Holdings Plc and Markit Economics rose to 48.8. India’s manufacturing grew at the fastest pace in eight months.

In the U.S., the Institute for Supply Management’s U.S. manufacturing index rose to 54.1 in January from 53.1 in December, the Tempe, Arizona-based group’s data showed today. Fifty is the dividing line between growth and contraction, and the median forecast in a Bloomberg News survey called for an increase to 54.5.

A U.K. manufacturing index also rose, jumping to an eight-month high in January and unexpectedly returned to growth after a quarter of contraction as production rebounded.

BP climbed 2.6 percent to 483 pence, making the biggest contribution to the FTSE 100’s advance. U.S. District Judge Carl Barbier in New Orleans also ruled yesterday that BP will not have to cover any civil penalties against Halliburton under the Clean Water Act. The blowout of the Macondo well in the Gulf of Mexico led to the world’s largest accidental oil spill.

Johnson Matthey

Johnson Matthey climbed 5.3 percent to 2,159 pence after saying underlying profit before tax in the three months through December surged 34 percent from a year earlier to 104.3 million pounds ($164 million). Sales, excluding precious metals, rose 22 percent. Johnson Matthey, which produced the world’s first catalysts in 1974, has benefited from the increased use of the pollution-cutting devices in Asia and the U.S.

ICAP Plc rallied 7.7 percent to 362 pence after the world’s largest broker of transactions between banks said pretax profit for the fiscal year ending March 31 will be at the “upper end” of the current range of analyst estimates.

Bank shares were among the biggest gainers in western European markets today. Barclays Plc rallied 5.4 percent to 224.1 pence, extending its 21 percent surge in January. HSBC gained 2.3 percent to 541.9 pence.

Schroders, LSE Climb

Schroders Plc, the U.K.’s largest publicly traded money manager by market value, surged 8.7 percent to 1,576 pence, the biggest gain in three years.

London Stock Exchange Group Plc rose 5.4 percent to 917 pence, the largest increase since June, as the European Commission blocked Deutsche Boerse AG’s planned takeover of NYSE Euronext. The merger would have led to a “near monopoly” in the region’s exchange-traded derivatives, the commission said.

Ocado Group Plc soared 13 percent to 98.15 pence, the highest since October. The U.K.’s largest online grocer advanced 8.6 percent yesterday after predicting that sales growth will approach 20 percent by the end of the year and reporting a narrower annual loss.

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