U.K. Stocks Rise; BHP Billiton, Cairn Energy, Barclays Advance

By Adam Haigh

Jan. 11 (Bloomberg) -- U.K. stocks rose, led by raw- material producers, after Chinese trade figures added to signs the global economic recovery is accelerating.

BHP Billiton Ltd., the world’s biggest mining company, gained 1.5 percent as copper increased. BP Plc, Europe’s second-largest oil company, Cairn Energy Plc and Barclays Plc advanced more than 1 percent after Citigroup Inc. advised buying the shares.

The benchmark FTSE 100 Index rose 45.57, or 0.8 percent, to 5,579.81 as of 8:24 a.m. in London. The gauge surged 22 percent in 2009 for its biggest annual rally since 1997 and has rebounded 59 percent since March 3 as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy. The FTSE All-Share Index and Ireland’s ISEQ Index also gained 0.8 percent today.

“We expect equities to strengthen further over the balance of 2010 as economic conditions continue to improve,” JP Morgan Cazenove strategists Darren Winder and Robert Griffiths wrote in a report to clients.

China yesterday said exports climbed 17.7 percent from a year earlier, the first increase in 14 months, and imports surged 55.9 percent. The third-largest economy grew an estimated 8.5 percent last year, leading the world out of the worst recession since World War II.

Miners Advance

BHP Billiton added 1.5 percent to 2,147 pence. Rio Tinto Group, the third largest mining company, gained 2.8 percent to 3,740 pence. Copper, lead, nickel and tin rallied in London.

BP Plc added 1.1 percent to 628.2 pence and Cairn Energy advanced 3.5 percent to 374.4 pence after Citigroup Inc. raised its recommendation on both companies to “buy” from “hold” and lifted their “long-term” estimate for oil to $80 a barrel from $65.

Barclays, the U.K.’s second largest bank, gained 1.7 percent to 326 pence. Citigroup upgraded the shares to “buy” from “neutral.”

“In our view the market is applying too low a rating to Barclays’ earnings, considering these earnings to be ‘low quality,’ and continuing to view the stock as relatively ‘high risk,’” London-based Citigroup analyst Leigh Goodwin wrote in a report today.

SABMiller Plc dropped 1.9 percent to 1,804 pence after the world’s second-largest brewer lost out to rival Heineken NV in a bid for the beer division of Fomento Economico Mexicano SAB, or Femsa. Heineken agreed to buy the beer division of Femsa in an all-share transaction valued at 5.3 billion euros ($7.7 billion).

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