U.K. Stocks Advance for Biggest Quarterly Gain Since 2010

U.K. stocks advanced, with the FTSE 100 Index posting the biggest quarterly gain since 2010, as better-than-estimated German retail sales outweighed concern the euro-area debt crisis will deepen.

InterContinental Hotels Group Plc added 2.8 percent after agreeing to sell its London Park Lane Hotel to a Middle Eastern investment group. Johnson Matthey Plc rallied the most in two months after saying it bought Sweden’s Formox AB. Centamin Plc and Antofagasta Plc each fell at least 4 percent.

The FTSE 100 gained 24.18 points, or 0.4 percent, to 6,411.74 at the close of trading in London, extending this month’s gains to 0.8 percent. The benchmark gauge gained 8.7 percent this quarter, the most since September 2010, as U.S. lawmakers agreed on a compromise budget and reports on jobs and housing fueled optimism the world’s biggest economy is recovering.

“The German retail sales figure was surprising, although it’s partly from previous numbers that were revised down,” said Guy Foster, head of portfolio strategy at Brewin Dolphin Securities Ltd. in London. “The FTSE has ended the first quarter with high single-digit gains. That’s better than peers in Europe.”

The broader FTSE All-Share Index also added 0.4 percent today, while Ireland’s ISEQ Index jumped 1.1 percent.

German Retail

In Germany, retail sales unexpectedly rose in February. Sales, adjusted for inflation and seasonal swings, climbed 0.4 percent from January, when they gained a revised 3 percent, the Federal Statistics Office in Wiesbaden said. Economists in a Bloomberg survey had forecast a 0.6 percent decline last month.

Italy’s Pier Luigi Bersani, who has been given the first opportunity to form a coalition government after last month’s inconclusive elections, was today scheduled to report to President Giorgio Napolitano with the results of his negotiations. Bersani’s political grouping won a majority in the lower house. It failed to obtain a majority in the Senate.

Cyprus’s banks opened today for the first time in almost two weeks, with new rules curbing access to cash. The Central Bank of Cyprus’s capital controls include a 300-euro ($385) daily limit on withdrawals and restrictions on transfers to accounts outside the country.

InterContinental climbed 2.8 percent to 2,007 pence. The world’s largest provider of hotel rooms said in a statement it agreed to sell London Park Lane Hotel to an affiliate of Constellation Hotels Holding Ltd. for 301.5 million pounds ($457 million), 62 percent more than the book value at the end of December. IHG has signed a 30-year management contract for the hotel.

Johnson Matthey rose 2.2 percent to 2,300 pence, the biggest increase since Feb. 1, after saying it acquired Formox, which provides technology to formaldehyde producers, for 1.05 billion kronor ($161 million).

Petropavlovsk Plc gained 1.4 percent to 223.1 pence. The mining company forecast gold output of 760,000 ounces to 780,000 ounces this year, compared with 710,400 ounces in 2012.

Centamin tumbled 7.8 percent to 49.45 pence and Antofagasta slipped 4 percent to 984 pence.

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