U.K. stocks rallied the most in more than a week after euro-area leaders agreed to ease conditions on bailout loans to Spanish banks and pledged to spend $152 billion to stimulate the region’s economy.
CRH Plc and Wolseley Plc led construction-related shares higher, both climbing at least 4 percent. Berkeley Group Holdings Plc advanced 3.6 percent after the housebuilder reported a 66 percent jump in annual profit. Vedanta Resources Plc and Antofagasta Plc climbed as copper surged.
The FTSE 100 Index surged 109.27 points, or 2 percent, to 5,602.33 at 2:30 p.m. in London, extending its monthly advance to 5.3 percent, the biggest since October. The gauge has still lost 2.9 percent this quarter, paring its gain for the year to 0.5 percent, as European Union policy makers struggled to contain the sovereign-debt crisis.
“The second quarter ends with some unexpected good news,” Ian Williams, a strategist at Peel Hunt LLP in London, wrote in a report to clients. “The European Union summit has at least agreed a short-term fix in permitting the EU’s rescue funds to intervene directly by buying sovereign debt and recapitalizing the banks without an impact on government deficits. It’s good enough for now.”
After 13 1/2 hours of talks ending at 4:30 a.m. in Brussels, the leaders of the 17 euro countries waived their governments’ preferred-creditor status on bailout loans to Spanish banks. They also opened the door to recapitalizing lenders directly using the European Stability Mechanism once the euro area sets up a single banking supervisor.
The broader FTSE All-Share Index rose 2 percent today, while Ireland’s ISEQ Index jumped 3 percent, its biggest increase since November, as Irish Prime Minister Enda Kenny said the burden on taxpayers may be eased by the EU agreement.
EU leaders discussed reducing the market pressure on Italy and Spain, by allowing them to access rescue loans without relinquishing control of their economies.
All but five companies on the FTSE 100 rose today as the EU leaders also agreed to a 120 billion-euro ($152 billion) plan to promote growth in the 27-nation bloc though infrastructure financing.
CRH, the world’s second-biggest building-materials maker, advanced 8.2 percent to 1,242 pence in London. Wolseley, the largest supplier of heating and plumbing products, jumped 4 percent to 2,376 pence.
Berkeley Group led a rally by housebuilders, climbing 3.6 percent to 1,414 pence, after reporting a 66 percent increase in annual profit to 158.5 million pounds ($249 million) as the company sold more properties at higher prices. Analysts had projected 156 million pounds, the average of three estimates compiled by Bloomberg.
“Demand for residential property in good locations in London and the Southeast remained strong throughout the year, attracting interest from both U.K. domestic and international buyers,” Berkeley said in a statement.
Rival housebuilder Persimmon Plc advanced 6.8 percent to 608.5 pence. Taylor Wimpey Plc increased 5.7 percent to 47.8 pence, while Barratt Developments Plc surged 6.8 percent to 139 pence.
A gauge of mining shares rallied 4 percent as copper advanced the most since November in London. Lead, nickel, tin and zinc also climbed.
Vedanta Resources surged 5.3 percent to 917.5 pence, Antofagasta gained 5 percent to 1,098 pence and Rio Tinto Group, the world’s third-largest mining company, climbed 5.3 percent to 3,068 pence.
Pennon Group Plc dropped 1.7 percent to 764 pence, the worst performer on the FTSE 100. Suez Environnement Co. plunged to its lowest price in Paris since Europe’s second-biggest water utility held its initial public offering in 2008 after saying the “uncertain” economic outlook will crimp profit.
The volume of shares traded on the FTSE 100 was 24 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.