By Adam Haigh
Sept. 11 (Bloomberg) -- U.K. stocks climbed, extending their weekly advance, on speculation equities have yet to price in fully a recovery in the economy and growth in earnings.
The benchmark FTSE 100 Index added 29.09, or 0.6 percent, to 5,016.77 as of 8:33 a.m. in London, bringing this week’s increase to 3.4 percent. The FTSE All-Share Index climbed 0.6 percent today and Ireland’s ISEQ Index rose 1 percent.
Earnings at companies from Goldman Sachs Group Inc. to Roche Holdings AG and an unexpected return to growth in the French and German economies have boosted global stock markets since March. The FTSE 100 has soared 43 from its low on March 3.
“With earnings momentum likely to strengthen further as economic conditions continue to improve, equity returns are, in our view, also likely to strengthen further,” Darren Winder and Robert Griffiths, U.K. equity strategists at JPMorgan Cazenove, wrote in a report dated yesterday. “Our stance on equities therefore remains positive.”
The six-month rally has pushed the FTSE 100’s price-to- earnings ratio to 76, the most expensive level in seven years, according to data compiled by Bloomberg based on reported results.
BHP Billiton, the world’s largest mining company, added 1.8 percent to 1,695.5 pence. Rio Tinto, the third biggest, gained 1.8 percent to 2,590 pence.
China’s industrial production rose at a faster pace than forecast in August and new lending unexpectedly climbed, indicating growth in the world’s third-biggest economy is likely to accelerate.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
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