By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Shares of ARM Holdings PLC led U.K. stocks higher on Tuesday, after a well-received earnings report, while Associated British Foods PLC gained after declaring an increase in dividends.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.52% jumped 2% to end at 6,406.12.
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ARM Holdings rallied nearly 12%, after the chip maker posted a better-than-expected 28% rise in first-quarter revenue, boosted by strong demand for its microchip designs. Adjusted pretax profit jumped 44%, beating expectations of a 25% rise.
Shares of Associated British Foods /zigman2/quotes/204493701/delayed UK:ABF -0.51% surged 8.1%, after the food and clothing company reported a 26% rise in first-half pretax profit and declared a 10% increase in interim dividends.
International Consolidated Airlines Group SA /zigman2/quotes/208070069/delayed UK:IAG -1.73% gained 5.2%, after shareholders at Vueling Airlines SA , a low-cost Spanish carrier, accepted a cash tender offer for most of the stake in the company not already owned by IAG.
Rolls-Royce Holdings PLC gained 3.3%. The power-systems developer said it has agreed to sell its shareholding and interest in the RTM322 helicopter-engine program to Turbomeca, which is part of engineering group Safran SA /zigman2/quotes/206963350/delayed FR:SAF 0.00% .
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Shares of SABMiller PLC gained 3.4%, after the brewer said Executive Chairman Graham Mackay has been diagnosed with a brain tumor and therefore has accelerated the planned promotion of Alan Clark to chief executive with immediate effect.
Banks were also among notable movers, tracking gains for the sector across Europe, after weak macro economic data fueled speculation that the European Central Bank could move to cut rates at its policy-setting meeting next week.
Lloyds Banking Group PLC /zigman2/quotes/202285510/delayed UK:LLOY -1.90% /zigman2/quotes/200709414/composite LYG -4.31% added 4%, Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC -1.70% gained 3% and HSBC Holdings PLC /zigman2/quotes/203901799/delayed UK:HSBA +1.13% /zigman2/quotes/202687335/delayed HK:5 0.00% rose 1.3%.
Disappointing data from China weighed on mining stocks, as the country is a major user of natural resources. The preliminary version of HSBC’s manufacturing purchasing managers’ index fell to a two-month low of 50.5 from March’s final reading of 51.6, and below a Bloomberg forecast of 51.5.
Shares of Fresnillo PLC /zigman2/quotes/201300065/delayed UK:FRES +1.75% dropped 2.2%, Antofagasta PLC /zigman2/quotes/200173667/delayed UK:ANTO 0.00% slipped 1% and Randgold Resources Ltd. fell 0.8%. In contrast, Rio Tinto PLC /zigman2/quotes/208934945/delayed UK:RIO -0.45% /zigman2/quotes/202627887/composite RIO -2.03% /zigman2/quotes/200083756/delayed AU:RIO -0.84% inched 0.7% higher and Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL -0.62% rose 0.2%.
Outside the main index in London, shares of Kazakhmys PLC /zigman2/quotes/208098927/delayed UK:KAZ +0.19% lost 3.8%, after Goldman Sachs cut the miner to sell from neutral.