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Playing FTSE with 15-year highs

U.K. stocks rose, with the FTSE 100 Index reaching its highest level since December 1999, while HSBC Holdings Plc posted profit that missed analysts’ estimates.

Dixons Retail Plc rallied 6.7 percent after saying it’s in talks to merge with Carphone Warehouse Group Plc. Bunzl Plc climbed 6.9 percent after posting a jump in full-year revenue, exceeding projections. HSBC, Europe’s largest bank, fell 2.8 percent. RSA Insurance Group Plc lost 3.7 percent as the insurer said it is considering a rights offering.

The FTSE 100 Index rose 27.8 points, or 0.4 percent, to 6,865.86 at the close in London. The gauge earlier fell as much as 0.6 percent before rallying in the final hour of trading. The FTSE All-Share Index gained 0.4 percent today, while Ireland’s ISEQ Index added 1 percent.

“European markets are focused on the macroeconomic picture within Europe,” Louis de Fels, a Paris-based fund manager at Raymond James Financial Inc., which oversees about $53 billion, said by telephone. “People want to buy domestically oriented stocks. You have money inflows and better economic data. The two combined help the market further, but we are not out of the woods yet. There will still be volatility in the markets.”

The number of shares changing hands in FTSE 100-listed companies was 24 percent higher than the 30-day average, according to data compiled by Bloomberg.

Dixons Retail

Dixons Retail rallied 6.7 percent to 50.3 pence. A merger of the largest U.K. consumer-electronics retailer and Carphone Warehouse would bring together companies with combined revenue of about 12 billion pounds ($20 billion). Discussions are at a preliminary stage and there is no certainty of a transaction taking place, the companies said today in a statement. Carphone jumped 8.8 percent to 333 pence.

Bunzl climbed 6.9 percent to 1,585 pence, the highest price since at least September 1988. The world’s largest distributor of disposable tableware and food packaging reported full-year revenue rose 12 percent to 6.1 billion pounds from a year ago, exceeding the average 6.07 billion pounds that analysts had projected.

Severn Trent Plc gained 1.2 percent to 1,830 pence, climbing for the fourth straight day to the highest price since November. RBC Capital Markets raised the water utility to sector perform from underperform, meaning that it no longer recommends selling the stock. The brokerage said that regulatory clarity will improve.

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