U.K. Stocks Rise, Paring Weekly Drop; Cable & Wireless Advances

By Adam Haigh

Nov. 20 (Bloomberg) -- U.K. stocks advanced, rebounding from a three week low, as raw-material companies were buoyed by rising metals prices and JPMorgan Chase & Co. recommended Cable & Wireless Plc.

Xstrata Plc led a rally in mining companies. Cable & Wireless climbed 2.4 percent after JPMorgan advised buying the U.K.’s second-biggest fixed-line phone company.

The benchmark FTSE 100 Index added 34.16, or 0.7 percent, to 5,301.86 as of 10:16 a.m. in London, paring this week’s loss to less than 0.1 percent. The gauge has rebounded 51 percent from this year’s low on March 3 amid signs government stimulus policies and record-low interest rates are helping to drag the global economy out of recession. The FTSE All-Share Index gained 0.5 percent today and Ireland’s ISEQ Index increased 0.7 percent.

“There is room for higher prices” for equities, said Christoph Riniker, a strategist at Bank Julius Baer & Co. Ltd. “There still might be more positive surprises going forward. Next year we’ll see higher prices but just not that steep a rise as we’ve seen over the past months,” he told Bloomberg Television.

Xstrata, the world’s largest exporter of coal used by power stations, climbed 1.3 percent to 1,084 pence. Lonmin Plc, the third-largest platinum maker, rose 2.4 percent to 1,726 pence. Copper, lead, nickel and zinc advanced on the London Metal Exchange.

Cable & Wireless Plc gained 2.4 percent to 138.9 pence. The shares were raised to “overweight’” from “neutral” at JPMorgan, which cited the phone company’s “above-average exposure to economic recovery.”

Thomas Cook Group Plc slid 4 percent to 209.7 pence. Morgan Stanley cut Europe’s second-biggest tour operator to “underweight” from “equal-weight,” saying demand is still weak across the industry and debt refinancing is a “risk.”

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.