U.K. stocks rose for a third day, extending a seven-week high, as U.S. payrolls data beat economists’ forecasts and the jobless rate fell to an almost four-year low.
Thomas Cook Group Plc rallied 13 percent as Morgan Stanley said investors should buy the tour operator’s shares. Berkeley Group Holdings Plc climbed to a five-year high after the homebuilder reported increased profit and announced its first dividend since 2008. Marks & Spencer Group Plc retreated as Goldman Sachs Group Inc. advised selling the shares.
The FTSE 100 Index rose 12.98 points, or 0.2 percent, to 5,914.4 at the close in London. The gauge gained 0.8 percent this week, its third straight advance. It has rallied 12 percent since a low on June 1 as the European Central Bank announced an unlimited bond-buying plan and the Federal Reserve began a third round of asset purchases. The broader FTSE All-Share Index and Ireland’s ISEQ Index also added 0.2 percent today.
“The U.S. jobs report provided an unexpected boost this afternoon,” said Craig Erlam, a market analyst at Alpari U.K. Ltd. in London. “It’s difficult to get carried away with these figures though,” he said, adding that any revisions will probably depress the November payroll numbers.
U.S. employment climbed by 146,000 last month following a 138,000 gain in October that was less than initially estimated, Labor Department figures showed. The median estimate of a Bloomberg survey called for a gain of 85,000. The unemployment rate fell to 7.7 percent, the lowest since December 2008. The December data will be released on Jan. 4.
Still, the Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment decreased to 74.5 this month from 82.7 in November. Economists had projected a reading of 82, according to the median of 67 estimates in a Bloomberg survey.
The FTSE 100 earlier dropped as much as 0.2 percent as U.K. manufacturing production fell more than economists forecast in October. Factory output slid 1.3 percent from September, the most in four months, the Office for National Statistics said. The median forecast of 28 economists in a Bloomberg survey was for a 0.2 percent decline.
In Germany, the Bundesbank cut its 2013 projection for economic growth to 0.4 percent from the 1.6 percent predicted in June. Europe’s largest economy will recover to expand 1.9 percent in 2014, the Frankfurt-based central bank said. Separately, the Economy Ministry said German industrial production tumbled 2.6 percent in October.
Thomas Cook surged 13 percent to 36 pence for the biggest four-day rally since February. Morgan Stanley raised its recommendation on the U.K. tour operator to overweight, the equivalent of buy, from equal weight.
Berkeley Group advanced 4.7 percent to 1,728 pence, the highest price since July 2007. The U.K.’s second-largest homebuilder by market value announced an interim dividend of 15 pence a share as first-half profit rose 45 percent.
Centrica Plc climbed 1.6 percent to 337 pence as the company was added to UBS AG’s most-preferred stock list. Shares of the U.K.’s largest household energy supplier have rallied 16 percent this year.
Diageo Plc rose 1.3 percent to 1,878.5 pence as Banco Santander SA upgraded its recommendation on the stock to buy from hold. Separately, the world’s biggest distiller said it will keep looking for acquisition opportunities in China.
Marks & Spencer, the U.K.’s biggest clothing retailer, declined 1.1 percent to 393.6 pence after Goldman Sachs cut its recommendation on the stock to sell from neutral.
International Continental Airlines Group SA, parent company of British Airways and Iberia, dropped 1.8 percent to 171.2 pence, the biggest decline in the FTSE 100. IAG’s Spanish unit said today’s union negotiations failed to avert holiday-season strikes.
Standard Chartered Plc fell 1 percent to 1,485.5 pence. Jim Antos, an analyst at Mizuho Financial Group Inc., said the lender’s 2012 pretax profit will be depressed by a settlement over regulators’ claims its transactions with Iranian clients violated U.S. sanctions.