U.K. Stocks Rise as Investors Await Greek Deal; ARM Gains

U.K. stocks advanced for a second day as optimism mounted that private creditors will approve a Greek debt swap and as the Bank of England maintained its key interest rate and bond-purchase target.

William Morrison Supermarkets Plc rose after reporting an increase in full-year profit. ARM Holdings Plc jumped 3.6 percent after Morgan Stanley upgraded the stock.

The FTSE 100 Index gained 68.32, or 1.2 percent, to 5,859.73 at the close in London. Stocks climbed 0.4 percent yesterday after a report showed hiring in U.S. companies accelerated in February. The gauge has rallied 5.2 percent this year. The broader FTSE All-Share Index increased 1.2 percent today, while Ireland’s ISEQ Index added 2.5 percent.

“Greece is likely to force the hand of those that don’t want to participate in the bond swap and it looks like it will go through one way or another,” said Manoj Ladwa, a senior trader at ETX Capital in London.

Investors with about 60 percent of the Greek bonds eligible for the nation’s debt swap have so far indicated they’ll participate, putting the country on the verge of the biggest sovereign restructuring in history. The offer, which ends at 10 p.m. Athens time today, aims to reduce the 206 billion euros of privately held Greek debt by 53.5 percent.

Monetary Policy

The Bank of England today held its key rate at 0.5 percent and maintained its commitment to buy an additional 50 billion pounds ($79 billion) of bonds by May after lifting its target for asset purchases to 325 billion pounds last month, as forecast by economists.

European Central Bank policy makers kept the benchmark rate at a record low of 1 percent today, meeting economists’ forecasts in a Bloomberg News survey. ECB President Mario Draghi said inflation will probably breach the bank’s 2 percent limit this year even as the economy stalls.

The ECB’s latest economic projections show inflation averaging 2.4 percent in 2012, up from a December forecast of 2 percent. The euro-area economy may contract 0.1 percent, compared with the previous forecast for 0.3 percent growth.

German industrial output rose 1.6 percent in January, rebounding from a December drop. Economists forecast an increase of 1.1 percent, according to a Bloomberg News survey.

Morrison gained 1.7 percent to 289.7 pence. The smallest of the U.K.’s four main grocers reported an 8 percent gain in full-year profit -- better than analysts estimated --and said it plans to open more convenience stores and expand a revamped fresh-food concept.

Technology for iPad

ARM Holdings, whose chip designs are used in Apple Inc.’s iPad, added 3.6 percent to 569 pence. Morgan Stanley raised the stock to “overweight” from “equalweight.” Apple unveiled a new version of the iPad yesterday.

Imagination Technologies Group Plc jumped 8.4 percent to 652 pence.

Aviva Plc added 1.6 percent to 356.8 pence. Britain’s second-biggest insurer by market value reported full-year profit that beat analysts’ estimates as earnings in the U.K. outweighed slower growth in Europe.

GlobeOp Financial Services SA surged 6 percent to 485.25 pence. SS&C Technologies Inc. said it made an improved offer of 485 pence a share in cash for the company. The directors of GlobeOp said they would be willing to recommend an offer by SS&C at that level, SS&C said today.

Mining Companies

Xstrata Plc rose 1.8 percent to 1,147 pence. The company said its $500 million purchase of the Sukunka coking coal deposit in British Columbia from Talisman Energy Inc. will “significantly increase” its holdings of hard coking coal, while “unlocking synergies” with neighboring assets in the Peace River coalfield.

A gauge of London-listed mining companies advanced 1.9 percent as most metal prices rose. BHP Billiton Ltd. rose 1.5 percent to 1,988.5 pence. Rio Tinto Group added 2.7 percent to 3,460 pence.

Old Mutual Plc, the third-largest U.K. insurer, rose 2.9 percent to 162.6 pence. The company said Swedish and Danish regulators have approved the 2.1 billion-pound sale of its Nordic unit to Skandia Liv.

Petrofac Ltd., the oil and gas engineering company, gained 5.3 percent to 1,675 pence after the stock was upgraded to “overweight” from “neutral” at JPMorgan & Chase Co.

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