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U.K. Stocks Advance Most in Eight Weeks as Vodafone Gains

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U.K. Stocks Advance Most in Eight Weeks as Vodafone Shares Rally
Vodafone gained 3.8 percent to 214.1 pence, its highest price since January 2002. Photographer: Chris Ratcliffe/Bloomberg

Sept. 2 (Bloomberg) -- U.K. stocks rose the most in eight weeks as manufacturing expansion quickened in Britain and China, and Vodafone Group Plc rallied to an 11 1/2-year high.

Vodafone advanced 3.4 percent before Verizon Communications Inc. agreed to buy out its stake in their wireless venture. Rio Tinto Group and Anglo American Plc climbed at least 3.9 percent. Bovis Homes Group Plc led builders higher after data showed house prices grew faster in August.

The FTSE 100 Index added 93.26 points, or 1.5 percent, to 6,506.19 at the close in London, for its biggest increase since July 4. The benchmark gauge lost 3.1 percent last month on concern the U.S. will take military action against Syria. The broader FTSE All-Share Index rose 1.5 percent today, while Ireland’s ISEQ Index advanced 1.4 percent.

“The Chinese and U.K. figures we had today -- and the form of privatized quantitative easing we got with Vodafone -- have meant that things should be relatively positive,” Justin Urquhart Stewart, who helps oversee about $6.8 billion at Seven Investment Management in London, said by telephone. “The geopolitical issue has gone at least behind the clouds. It hasn’t gone away, but people are focusing on the bigger picture in terms of the global economy still slowly healing.”

The volume of shares traded in FTSE 100-listed companies was 11 percent below the average of the last 30 days, according to data compiled by Bloomberg. Stocks slid last week amid investor concern any military action by the U.S. against Syria may escalate into a larger conflict in the Middle East and push up oil prices.

Manufacturing Gauges

A U.K. factory index jumped to its highest level in 2 1/2 years, data showed today. Markit Economics and the Chartered Institute of Purchasing and Supply said the gauge climbed to 57.2 in August from a revised 54.8 in July. A reading above 50 indicates expansion. Economists in a Bloomberg survey had forecast a reading of 55 from a previously reported 54.6.

In China, a measure of manufacturing rose to 51 in August from 50.3 in July. That exceeded the median economist estimate in a Bloomberg survey for a reading of 50.6. Separate data showed a purchasing managers’ index for manufacturing published by Markit Economics and HSBC Holdings Plc increased to 50.1 last month from 47.7 in July.

Vodafone gained 3.4 percent to 213.2 pence, its highest price since December 2001. In a deal announced after the London market closed, Verizon agreed to purchase Vodafone’s 45 percent stake in Verizon Wireless. The $130 billion transaction gives Verizon full control of the most profitable U.S. mobile-phone carrier. The deal has been approved by both companies’ boards and is expected to be completed in the first quarter of 2014, according to a statement today.

Commodity Producers

A gauge of U.K. mining companies jumped 2.8 percent as the price of copper and silver climbed. Rio Tinto jumped 4.2 percent to 3,035 pence. Anglo American rallied 3.9 percent to 1,536 pence, while BHP Billiton Ltd. added 2.3 percent to 1,921 pence.

Bovis Homes Group Plc climbed 4.5 percent to 777 pence. Barratt Developments Plc gained 4.5 percent to 317 pence. Taylor Wimpey Plc increased 4.5 percent to 103.9 pence.

Average house values in England and Wales rose 0.4 percent after a 0.3 percent gain in July, property researcher Hometrack said. Prices jumped 1.8 percent from a year earlier, the most since July 2010.

Inmarsat Plc climbed 5.4 percent to 732.5 pence, its highest price since May 1. Morgan Stanley raised its recommendation for the largest provider of maritime satellite services to overweight, a rating similar to buy, from equal weight. Inmarsat’s spectrum assets currently stuck with the bankrupt LightSquared Inc. are undervalued, the brokerage said. A potential bid for the U.S. company by Dish Network Corp. may help LightSquared to resume payments to Inmarsat by April 2014, Morgan Stanley said.

WPP Plc jumped 3.5 percent to 1,237 pence, the highest price since March 2000. Deutsche Bank raised its rating of the world’s largest advertising company to a buy from hold. WPP is most likely to benefit in a changing advertising landscape that faces increased competition from technology and opportunities from a transition to the digital medium, according to analysts Patrick Kirby and Matt Chesler.

Fresnillo Plc retreated 2.2 percent to 1,275 pence for the biggest decline in the FTSE 100. The silver-and-gold producer was cut to neutral from buy by UBS AG analyst Daniel Major, who said the valuation looks less attractive after shares rallied 27 percent in August.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

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

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