European leaders' progress on debt crisis helps London extend rally

FTSE: 5,548.06 (+59.41) Mid-250: 10,469.09 (+203.60) Small Cap: 2,823.79 (+22.78)UK STOCKS advanced yesterday, extending the benchmark FTSE 100 Index's longest stretch of weekly gains this year, as China and Japan showed signs of stronger growth and European leaders edged toward a strategy to end the debt crisis.

The FTSE 100 added 1.1 per cent, at the close in London. The gauge has tumbled 8.9 per cent from this year’s highest level in February amid concern that the debt crisis is worsening and the global economy is faltering. The broader FTSE All-Share Index rose 1.3 per cent yesterday.

“All eyes are very much on European leaders’ attempts to find a workable solution to the ongoing debt crisis and with encouraging signs of progress emerging over the weekend,” said Stan Shamu, a market strategist at IG Markets in Melbourne.

European leaders outlined plans to aid banks and ruled out tapping the European Central Bank’s balance sheet to boost the region’s rescue fund on Sunday at their crisis-management summit.

The complete blueprint will take shape by tomorrow, when they meet again.

Growth in Asia reports yesterday showed China’s manufacturing may grow in October for the first time in four months and Japanese exports increased more than economists’ estimates in September.

Rio Tinto rose 7.1 per cent to 3,373.5p.

BHP Billiton advanced 5.2 per cent to 1,996p.

Copper, lead, nickel, tin and zinc prices climbed on the London Metal Exchange.

Alterian rallied 28 per cent to 81p after SDL said it had offered 80p a share on October 21st for the company.

Kesa Electricals soared 17 per cent to 110.6p after the Daily Telegraph reported that the retailer may delist from the London Stock Exchange after selling Comet unit.

Intercontinental Hotels rose 0.8 per cent to 1,124p after saying same-store revenue per available room in the US increased 8 per cent in the third quarter.

McBride rose 8.1 per cent to 126.75p as adjusted sales increased about 2 per cent since July.

Lloyds Banking advanced 5.3 per cent. The part-nationalised bank said on Sunday that a flotation of 630 branches remained an option, along with a sale of the branches. – (Bloomberg/Reuters)