U.K. Stocks Rise; Eurasian Natural Resources, Xstrata Advance

By Adam Haigh

Dec. 1 (Bloomberg) -- U.K. stocks rose after China’s manufacturing grew last month at the fastest pace in five years and concern abated that losses from a possible default by Dubai World will spread.

Rio Tinto Group, Royal Dutch Shell Plc and BHP Billiton Ltd. led gains among raw-material producers on signs the Chinese economy is boosting global growth. Eurasian Natural Resources Corp. climbed 5.4 percent after BofA Merrill Lynch Global Research added the shares to its “Europe 1” list.

The benchmark FTSE 100 Index gained 85.54, or 1.7 percent, to 5,276.22 as of 9:57 a.m. in London. The FTSE All-Share Index climbed 1.6 percent and Ireland’s ISEQ Index added 0.7 percent.

The FTSE 100 has rebounded 50 percent from its low on March 3 amid government stimulus programs and record low-interest rates. The gauge fell 3.3 percent from Nov. 25 through yesterday as Dubai World’s move to delay debt payments risked triggering the biggest sovereign default since 2001.

“Investors were in danger of exaggerating the standstill of Dubai World debt,” said Andrew Garthwaite, the London-based head of global equity strategy at Credit Suisse Group AG. “The numbers are actually a lot smaller” for exposure from foreign banks. He spoke in a Bloomberg television interview.

Dubai World, the investment company seeking to delay repayment on some of its $59 billion of liabilities, yesterday said it is in “constructive” initial talks with banks to restructure about $26 billion in debt.

China’s purchasing managers’ index released today by HSBC Holdings Plc rose to a seasonally adjusted 55.7 in November from 55.4 the previous month. The government’s PMI, also released today, held at an 18-month high.

Copper Advances

Copper advanced in London after China, the biggest user of the metal, expanded at the fastest pace in five years and the dollar fell for a second day. Lead, nickel and zinc also increased.

Rio Tinto, the third-largest mining company, gained 3.2 percent to 3,187 pence. BHP Billiton, the biggest, added 2.5 percent to 1,903 pence. Eurasian Natural Resources, which produces steelmaking raw materials in Kazakhstan, increased 5.4 percent to 908 pence.

Xstrata Plc climbed 3.3 percent to 1,104 pence. Zijin Mining Group Co., China’s third-largest copper producer, agreed to pay A$545 million ($500 million) for Indophil Resources NL to gain a stake in Southeast Asia’s largest untapped copper and gold deposit. Xstrata is the largest shareholder of Indophil and is the majority owner of the deposit which it shares with the Melbourne-based company.

Royal Dutch Shell Plc, Europe’s biggest oil company, advanced 1.4 percent to 1,826 pence. Crude rose for a second day after the Chinese manufacturing report, spurring hopes that the world’s second-biggest oil user will buoy consumption of the fuel.

The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.

Greene King Plc (GNK LN): The U.K. pub owner and brewer of Old Speckled Hen ale soared 32.6 pence, or 8.1 percent, to 433.9. First-half profit advanced 85 percent as the company focused more on food sales.

Shaftesbury Plc (SHB LN) gained 13.3 pence, or 3.6 percent, to 381.9. The largest landlord in central London’s Carnaby Street neighborhood said its annual loss narrowed as the value of its properties declined more slowly.

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