U.K. Stocks Climb as BT Jumps on Pension-Deficit Pledge

U.K. stocks rose the most in a week, as BT Group Plc jumped to its highest price since 2008 after the company said it will pay off half of its pension deficit and may increase its dividend.

Essar Energy Plc surged 9.1 percent after Morgan Stanley recommended buying the stock. Regus Plc gained 1.3 percent after Panmure Gordon & Co. upgraded the shares. Randgold Resources Ltd. slid 2 percent as Citigroup Inc. downgraded the mining company following yesterday’s coup in Mali.

The FTSE 100 advanced 0.2 percent to 5,854.89 at the close in London, after earlier losing as much as 0.8 percent. The gauge declined 1.9 percent this week, its biggest retreat since December. The FTSE 100 has still added 5.1 percent this year. The broader FTSE All-Share Index gained 0.2 percent today, while Ireland’s ISEQ Index increased 0.1 percent.

“Earnings momentum across all U.K. sectors has improved in recent weeks,” Darren Winder, an equity strategist at Oriel Securities Ltd. in London, wrote in a report today. “ We expect equity prices to continue to trend upwards during 2012.”

The volume of shares changing hands on the FTSE 100 today was 4.4 percent less than the average over the past 30 days, according to data compiled by Bloomberg.

U.S. House Sales

In the U.S., a report showed that new house sales decreased last month. Purchases dropped to an annual rate of 313,000 in February from a revised 318,000 in January. That fell short of the median estimate of 78 economists in a Bloomberg News survey for a reading of 325,000.

In the U.K., consumer confidence declined last month, according to a report. An index of sentiment fell to 44 from 47 in January, the Nationwide Building Society said. A gauge of consumers’ expectations for the economy fell 4 points to 60.

BT jumped 5.4 percent to 232.1 pence, its highest price since May 2008. The U.K.’s largest fixed-line operator said it will pay 2 billion pounds ($3.2 billion) to narrow the deficit in its pension plan, enabling it to reduce annual payments to the final-salary arrangement. BT will reassess its dividend after making the pension payment, Chief Executive Officer Ian Livingston said.

Essar Energy surged 9.1 percent to 153.8 pence after Morgan Stanley raised its recommendation on the shares to overweight from equal weight, meaning that investors should hold more of the shares than are represented in benchmark indexes.

Regus Plc gained 1.3 percent to 116 pence after Panmure Gordon raised its recommendation on the shares to buy from hold.

Randgold Retreats

Randgold slipped 2 percent to 5,650 pence as Citigroup cut its rating on the shares to neutral from buy, saying the “key damage is to risk perception,” after a coup toppled the government in Mali, where the company operates three mines.

Cable & Wireless Worldwide declined 1.3 percent to 37.5 pence. Some Vodafone directors are said to be concerned that a 1 billion pound bid for Cable & Wireless will damage the company’s reputation, City A.M. reported today. The newspaper did not cite anyone.

Tawa Plc plunged 10 percent to 40 pence after the company posted a full-year loss after taxes of $21.6 million, compared with a profit of $1.8 million a year earlier.

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