U.K. Stocks Rally as Greece Passes Package of Austerity Measures
U.K. stocks climbed for a fourth day, the longest stretch of gains in a month, after Greek lawmakers passed a package of austerity measures needed to avoid a default.
Antofagasta Plc (ANTO) led mining companies higher as base metals rallied and the copper producer said it expects to see “huge demand” from China. Kazakhmys Plc (KAZ) advanced as the company opened a secondary listing in Hong Kong. Ferrexpo Plc (FXPO), Man Group Plc (EMG), ITV Plc (ITV) and ICAP Plc (IAP) all surged amid speculation they may become takeover targets.
The benchmark FTSE 100 Index (UKX) increased 89.07, or 1.5 percent, to 5,855.95 at the 4:30 p.m. close in London. The gauge has still lost 3.9 percent from this year’s peak in February amid concern that Greece will default on its debt. The All-Share Index also gained 1.5 percent today, while Ireland’s ISEQ Index rose 1 percent.
“The affairs in Greece are dominating what is otherwise a relatively quiet market,” said Yusuf Heusen, senior sales trader at IG Index in London. “Traders have been riding the recent wave of confidence on the broad-based assumption that the austerity vote will be passed.”
Greek Prime Minister George Papandreou clinched enough votes to pass the first part of the austerity plan after gaining 155 votes in the 300-seat Parliament. The European Union has made the budget cuts a condition of providing further aid to the indebted country.
Antofagasta rallied 4.8 percent to 1,365 pence as Chief Executive Officer Jean Paul Luksic said the company expects to benefit from increased demand for metal as China and other emerging economies develop.
Luksic, whose family controls Antofagasta, said the company will continue to invest in new mines in Chile and overseas to meet demand from the so-called BRIC economies of Brazil, Russia, India and China.
Kazakhmys, Kazakhstan’s biggest copper producer, rallied 3.9 percent to 1,350 pence as the company listed on the Hong Kong stock market. The shares also advanced as copper led base metals higher on the London Metal Exchange.
Ferrexpo, Man Group
Ferrexpo, a producer of iron ore in Ukraine, gained 2.6 percent to 469.6 pence after the Independent cited speculation from unidentified sources that BHP may make a takeover offer for the Baar, Switzerland-based company at a price of 650 pence to 700 pence a share.
Man Group rallied 3.8 percent to 233.7 pence after the Independent reported renewed takeover speculation for the hedge- fund manager, without saying where it got the information. The newspaper said previous talk had linked Man Group with Bank of New York Mellon Corp. and JPMorgan Chase & Co.
ITV, the U.K.’s biggest commercial broadcaster, jumped 6.6 percent to 71.95 pence after rallying more than 5 percent in the last hour of trading.
“We’ve seen a bit of activity in ITV towards the latter part of the day,” said Kishan Mandalia, a sales trader at City Index in London. “I did hear some bid speculation on ITV for 110 to 120 pence per share and RTL Group was named.”
ITV spokesman Mike Large and RTL spokesman Oliver Herrgesell both declined to comment.
ICAP, the world’s biggest broker of trades between banks which had lost 18 percent this year through yesterday, surged 9.7 percent to 478.8 pence. That’s the biggest increase since February 2010.
“There has been some talk about ICAP being bought out again, but we have heard this in the past,” said Atif Latif, a director of trading at Guardian Stockbrokers in London. “On a more fundamental view, they have been sold off over the last few months” as Chief Executive Officer Michael Spencer sold 1.5 million shares in May.
Mike Sheard, a spokesman at ICAP, declined to comment.
Charter International Plc (CHTR) soared 28 percent to 787 pence on the broader FTSE 250 Index after Melrose Plc proposed to buy the engineering company for about 1.3 billion pounds ($2 billion).
Marks & Spencer Group Plc paced declining shares, dropping 2 percent to 361.6 pence after the Financial Times reported that the retailer has begun its summer sale two weeks ahead of schedule, without saying where it got the information.
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