U.K. stocks rallied for a second day as the Bank of England expanded its bond-purchase plan and investors speculated European Union policy makers will contain the region’s debt crisis.
Shares in SABMiller Plc (SAB), the world’s second-biggest brewer, jumped 6.9 percent after Brazilian website IG reported Anheuser- Busch InBev NV may buy the British-South African brewer for $80 billion. Miners and banks led the advance. Rio Tinto Group, Eurasian Natural Resources Corp. and Kazakhmys Plc (KAZ) all climbed at least 6 percent. Standard Chartered Plc (STAN) and Lloyds Banking Group Plc (LLOY) also rose more than 6 percent.
The FTSE 100 Index (UKX) advanced 98.07 points, or 1.9 percent, to 5,200.24 at 1:00 p.m. in London, having earlier gained as much as 2.4 percent. The benchmark measure pared some of its gains after the European Central Bank left its interest rate unchanged. The gauge lost 14 percent in the third quarter, its biggest drop since 2002, amid concern that Greece’s debt woes will spread to other countries in the region and that the euro area’s economy is stalling.The FTSE All-Share Index also advanced 2.1 percent and Ireland’s ISEQ Index rose 1.9 percent.
Shares on the London market extended gains after the Bank of England said the “pace of global expansion has slackened” and raised its bond-purchase plan to 275 billion pounds ($365 billion).
“Markets are beginning to believe in European policy makers,” said Henrik Drusebjerg, a senior strategist at Nordea Bank AB in Copenhagen. “If the crisis is solved, there’s so much bad news priced into shares that people are now buying because they’re afraid to be left behind if the rally comes.”
U.K. banks advanced after German Chancellor Angela Merkel said the euro area will only use its rescue fund as a last resort to save banks and that investors may have to take deeper losses as part of a Greek rescue.
Standard Chartered rose 6 percent to 1,290 pence. Lloyds increased 5.7 percent to 34.88 pence. Barclays Plc (BARC) climbed 4.6 percent to 162.6 pence.
SABMiller shares surged 6.9 percent to 2,245 pence after Brazilian news website IG reported that the beer maker is in talks to be bought by world’s largest brewer Anheuser-Busch InBev.
Guilherme Barros, a columnist at the Sao Paulo-based website, said a deal could be worth about $80 billion. He didn’t say how he obtained the information. Spokespeople for the two brewers declined to comment on the report.
Rio Tinto advanced 6.4 percent to 3,090.5 pence and ENRC gained 7.8 percent to 601 pence. Kazakhmys surged 7 percent to 837.5 pence. A gauge of miners in the Stoxx Europe 600 Index was the best performer among 19 industry groups.
EasyJet Plc (EZJ) advanced 2.9 percent to 341.4 pence after saying it will open two new bases in France next year, strengthening its challenge to the nation’s flagship carrier Air France-KLM Group. Separately, EasyJet was upgraded to “outperform” from “neutral” at Credit Suisse.
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