U.K. Stocks Gain as BHP, Reckitt Benckiser Shares Rally

U.K. stocks gained for a ninth day as Reckitt Benckiser Group Plc and BHP Billiton Ltd. rallied after posting quarterly results, while a report showed that the U.S. economy created fewer jobs last month.

Reckitt Benckiser jumped the most in more than 4 1/2 years after third-quarter comparable sales grew faster than analysts had predicted. BHP climbed the most since July after the world’s biggest mining company reported quarterly iron-ore output that beat forecasts and increased its full-year production estimate.

The FTSE 100 Index rose 41.46 points, or 0.6 percent, to 6,695.66 at the close in London, its highest level since May 28. The gauge has gained 3.6 percent this month as U.S. lawmakers agreed to extend the government’s borrowing authority until early 2014. The broader FTSE All-Share Index added 0.5 percent to a five-month high today, while Ireland’s ISEQ Index retreated 0.3 percent.

“BHP and Reckitt both provided decent results as emerging-market plays,” said Guy Foster, head of portfolio strategy at Brewin Dolphin Securities Ltd., which manages 28 billion pounds ($45 billion). “Either could have disappointed, given the uncertainties surrounding the pace of the Chinese slowdown. The numbers and improved guidance have therefore been greeted well by investors.”

Reckitt Benckiser earned 24 percent of its sales from Latin America and Asia Pacific in 2012, while BHP generated 51 percent of its revenue from Asian countries excluding Japan last year, according to data compiled by Bloomberg.

U.S. Employment

U.S. payrolls dropped to 148,000 in September, falling short of the 180,000 median forecast of economists in a Bloomberg survey. Employers hired a net additional 193,000 workers in August. The unemployment rate slipped to 7.2 percent last month. Economists had projected joblessness would remain at 7.3 percent. The government shutdown delayed the Labor Department data originally due on Oct. 4.

The Federal Reserve will maintain its $85 billion in monthly bond purchases until March, according to the median forecast of economists surveyed on Oct. 17-18. A previous poll had indicated the central bank would start the cuts at last month’s meeting. The Federal Open Market Committee next meets on Oct. 29-30. The 16-day closure of the U.S. government slowed economic growth and disrupted the gathering of data.

“It would be borderline reckless for the Fed to tighten at the end of October after a period in which the data has been so patchy and confidence may have been shaken by a dysfunctional Washington,” Brewin Dolphin’s Foster said.

Reckitt Revenue

Reckitt Benckiser climbed 5.2 percent to 4,734 pence. The company said comparable sales, excluding the contribution from its pharmaceuticals unit, rose 5 percent, exceeding the 4.7 percent gain estimated by analysts in a Bloomberg survey.

The maker of Dettol antiseptic liquid and Strepsils throat lozenges said it will start a strategic review of its pharmaceuticals unit, which it does not count as a core business. Analysts such as Sanford C. Bernstein & Co.’s Andrew Wood have advocated selling it.

BHP gained 4.1 percent to 1,950.5 pence after posting iron-ore output of 48.8 million metric tons in the quarter ended Sept. 30. That beat the 47.8 million-ton median projection of analysts in a Bloomberg survey. The commodity producer also raised its full-year iron-ore production forecast to 212 million tons from 207 million tons.

GKN Plc advanced 1.7 percent to 368.8 pence after the aircraft-parts supplier posted third-quarter sales of 1.87 billion pounds. That exceeded the 1.83 billion-pound projection of analysts in a Bloomberg survey.

International Consolidated Airlines Group Plc lost 1.5 percent to 359 pence as Cantor Fitzgerald LP downgraded the parent of British Airways to hold from buy, saying the shares may decline after its quarterly results, following a recent rally. IAG surged 27 percent from an Aug. 30 low through yesterday’s close. It reports third-quarter earnings on Nov. 8.

The volume of shares changing hands in companies listed on the FTSE 100 was 10 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.