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U.K. Stocks Advance, Extending a Five-Year High

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March 11 (Bloomberg) -- U.K. stocks climbed for a third day, extending the FTSE 100 Index’s highest level in more than five years, as companies from Weir Group Plc to SABMiller Plc rallied to record highs.

SABMiller Plc advanced for a ninth day as Bank of America Corp. recommended the shares. Weir Group gained 2.4 percent to its highest price since at least 1989. Antofagasta Plc led mining companies higher, rallying 2.4 percent.

The FTSE 100 rose 0.3 percent to 6,503.63 at the close in London after swinging between gains and losses more than 10 times earlier in the day. The equity benchmark climbed to its highest level since December 2007 last week as economic reports from U.S. payrolls to Chinese exports bolstered optimism in the the global recovery.

“After all the excitement of last week, a degree of calm has descended on global markets,” said Chris Beauchamp, a market analyst at IG in London. “The general impression is a market that is girding itself for the next push higher.”

The broader FTSE All-Share Index also increased 0.3 percent, while Ireland’s ISEQ Index advanced 0.6 percent. The volume of shares changing hands in companies on the FTSE 100 was 16 percent lower than the 30-day average, according to data compiled by Bloomberg.

SABMiller climbed 1.4 percent to 3,452 pence, its highest price since listing in London in 1999. Bank of America reiterated its buy recommendation on the world’s second-biggest brewer and set a new share price estimate of 3,730 pence.

The bank cited a recent re-rating of consumer-staple companies and a positive outlook for beer markets outside Europe. The stock has surged 22 percent so far this year, while rival Diageo Plc has gained 12 percent.

Diageo, Weir

Diageo said a reorganization at its supply and procurement operation will lead to savings of 60 million pounds ($89.5 million) a year within three years. The stock gained 0.2 percent to 1,998.5 pence.

Weir rallied 2.4 percent to 2,474 pence, the highest price since at least 1989. The world’s biggest maker of pumps for the mining industry has rallied 32 percent so far this year. Even so, the company is the most shorted stock on the FTSE 100, with 14.6 percent of shares outstanding as of March 6, according to Markit.

Antofagasta rose 2.4 percent to 1,095 pence, the biggest advance on the FTSE 350 mining index. The stock climbed after Societe Generale SA raised its recommendation for the shares to hold from sell and copper rebounded in London. BHP Billiton Ltd. increased 1.4 percent to 2,126 pence.

Soco, Ladbrokes

Soco International Plc added 1.7 percent to 383.3 pence after the oil explorer said it plans to increase pumping capacity at its fields off the coast of Vietnam by about 27 percent, allowing it to pay an annual dividend to shareholders from this year.

Ladbrokes Plc surged 6.5 percent to 239.8 pence, its highest price since 2008, after the gambling operator expanded its software partnership with Playtech Ltd. The two companies will develop more games for Ladbrokes.com. Playtech rose 3.4 percent to 570 pence.

In Ireland, Elan Corp. climbed 4.1 percent to 8.96 euros. The drugmaker announced after the close of trading on March 8 that it plans to buy back $1 billion in shares at $11.25 to $13 apiece. Volume was about 88 percent of the stock’s three-month average, data compiled by Bloomberg showed.

European banks retreated after Fitch Ratings downgraded Italy’s credit rating by one level after the close of European markets on March 8. The downgrade comes before European Union leaders meet for a summit on March 14-15 to discuss the terms of a bailout for Cyprus.

Barclays, RBS

Barclays Plc fell 2.2 percent to 311.5 pence, paring last week’s 5 percent rally. Royal Bank of Scotland Group Plc slid 1.6 percent to 301.3 pence.

Lloyds Banking Group Plc slid 0.1 percent to 50 pence, recouping an earlier decline of as much as 1.9 percent. The lender announced after the close of trading that it plans to sell a 20 percent stake in St. James’s Place Plc for as much as as 400 million pounds.

Sage Group lost 2.2 percent to 341.9 pence. Bank of America downgraded the shares to underperform, the equivalent of a sell rating, and added the company to the list of its least-preferred technology stocks. Analyst Chandramouli Sriraman cited Sage’s slow development of cloud-based applications and said that the company’s valuation has probably peaked.

Carnival Plc declined 1.1 percent to 2,502 pence after rival Royal Caribbean Cruises Ltd. said 105 passengers and three members of crew on one of its cruise ships became ill with a stomach bug thought to be the norovirus.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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