U.K. Stocks Climb as Greek Lawmakers Agree on Austerity Package
U.K. stocks climbed to the highest level since July, rebounding from last week’s drop, as Greek lawmakers approved austerity measures to obtain a financial rescue package.
Cable & Wireless Worldwide Plc (CW/) rallied 45 percent as Vodafone Group Plc (VOD), the world’s largest mobile-phone company, said it’s evaluating a bid for the telecommunications services provider. Anglo American (AAL) Plc led gains in mining companies.
The FTSE 100 Index rose 53.31, or 0.9 percent, to 5,905.7 at the close in London, the highest since July 26. The measure has advanced 6 percent this year amid signs the U.S. economy is improving. The FTSE-All Share Index (ASX) also climbed 0.9 percent today and Ireland’s ISEQ Index added 0.1 percent.
The Greek parliament passed the legislation in the early morning hours today as rioters battled police and set fire to buildings in downtown Athens. Euro-area finance ministers will convene in Brussels on Feb. 15 to discuss the measures. Last week, they declined to ratify the 130 billion-euro ($172 billion) package, demanding that Greek officials put their austerity commitments into law.
“Greek politicians have effectively thrown the ball back into the court of eurogroup finance ministers,” said Michael Hewson, a markets analyst at CMC Markets in London. They “are due to meet on Wednesday, where they will have to either ratify the agreement, or reject it as insufficient, and demand more austerity measures.”
A total of 199 Greek lawmakers voted in favor of the austerity measures, with 74 against, Parliament Speaker Filippos Petsalnikos said.
‘One Way or Another’
Greece “will be saved in one way or another,” German Finance Minister Wolfgang Schaeuble told newspaper Welt am Sonntag yesterday.
The European Financial Stability Facility will supply a “significant” portion of aid needed for Greece’s rescue, WirtschaftsWoche reported, citing EFSF Deputy Chief Executive Officer Christophe Frankel. The EFSF will make its contribution in coming months and the period thereafter, the German magazine cited Frankel as saying.
U.K. stocks fell last week as Greece’s coalition government failed to agree on the remaining spending cuts needed to obtain financial aid from the European Union and stave off a default.
Cable & Wireless Worldwide surged 45 percent to 28.54 pence, the highest since November. Vodafone rose 1 percent to 174.4 pence.
Vodafone is in early stages of evaluating a potential offer for Cable & Wireless. A bid for Cable & Wireless will probably be in cash, Vodafone said in statement today. Vodafone may offer 700 million pounds ($1.1 billion), the Sunday Times of London reported yesterday.
“There is no certainty that an offer will be made nor as to the terms on which any offer might be made,” Vodafone said in its statement.
Cable & Wireless Plc split into two companies -- Cable & Wireless Worldwide and Cable & Wireless Communications Plc (CWC) -- in March 2010. Cable & Wireless Communications climbed 4.7 percent to 38.02 pence today.
Anglo American gained 2.6 percent to 2,817 pence and Rio Tinto Group added 2 percent to 3,845.5 pence.
Fidessa Group Plc (FDSA) lost 4.8 percent to 1,616 pence, the largest drop since October, after the financial-software developer said market conditions will remain difficult for some time.
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