U.K. stocks advanced, rebounding from the biggest three-day drop in more than eight months, as a report showed German industrial production increased more than forecast in February.
Weir Group Plc jumped 4.2 percent after General Electric Co. agreed to buy U.S. peer Lufkin Industries Inc. at a premium to its share price. Polymetal International Plc climbed the most since Sept. 14 after saying it will pay a 2012 final dividend of 31 cents a share. Mecom Ltd. plummeted the most in 10 months after forecasting a drop in advertising sales.
The FTSE 100 Index gained 27.16 points, or 0.4 percent, to 6,276.94 at the close in London. The gauge slid 3.7 percent in the past three days, the most since July. The FTSE 100 has still rallied 6.4 percent this year as U.S. lawmakers agreed on a compromise budget and data fueled optimism the world’s biggest economy is recovering. The broader FTSE All-Share Index also rose 0.4 percent today, while Ireland’s ISEQ Index added less than 0.1 percent.
“Investor sentiment remains quite elevated on a number of metrics we track,” Ronan Carr, European equities strategist at Morgan Stanley in London, wrote in a note today. “Liquidity conditions more broadly seem set to remain quite buoyant in 2Q13 as the major central banks seem likely to maintain or expand their loose monetary policies.”
In Germany, a report showed industrial production expanded in February. Production rose 0.5 percent, following a revised 0.6 percent drop in January, the Economy Ministry in Berlin said. That beat the 0.3 percent increase forecast on average by economists in a Bloomberg survey.
Alcoa, the biggest U.S. aluminum producer, unofficially kicks off the earnings season in the world’s largest economy after the close of U.S. markets today. Earnings at companies in the Standard & Poor’s 500 Index may drop 1.8 percent in the first quarter, according to estimates compiled by Bloomberg.
Britain retained its top credit rating at S&P, according to a statement in London late April 5. S&P affirmed the U.K.’s AAA rating, saying the government has the ability to respond quickly to challenges. It maintained a negative outlook on the economy.
The volume of shares changing hands in companies on the FTSE 100 was 32 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Weir Group, the world’s largest maker of pumps for miners, jumped 4.2 percent to 2,276 pence. GE agreed to buy Lufkin for $3.3 billion, or $88.50 a share, 38 percent more than the Texas-based oil-pump maker’s closing price on April 5.
Polymetal gained 5.3 percent to 882 pence after the company said in a preliminary-results statement it will pay a final dividend representing 30 percent of its earnings of $401 million in 2012.
Premier Oil Plc climbed 6.1 percent to 385 pence. Lundin Petroleum AB said its Luno II exploration well discovered oil in the PL359 area of the North Sea, off the coast of Norway. Premier Oil owns 30 percent of the field and Lundin owns 40 percent.
A gauge of oil and gas producers in the FTSE 350 Index advanced for the first time in four days. Tullow Oil Plc added 3.2 percent to 1,191 pence and Afren Plc climbed 6.1 percent to 135 pence.
Mecom Group Plc plunged 34 percent to 55 pence, the most since June, after saying it expects Dutch advertising revenues in March and April to decline more than 20 percent, compared with the year-earlier period.
“If the pattern of recent declines in advertising revenues were to continue, total Dutch revenues would fall significantly short of current market expectations,” the company said in a statement.