By Sarah Turner
LONDON (Dow Jones)--U.K. stocks surged on Monday to a 13-month closing high with the government-held banks among the few that were left behind.
The U.K. FTSE 100 index finished with a jump of 91.3 points, or 1.8%, to 5,281.54, its best finish since Sept. 19 of 2008.
Other European shares were also higher and U.S. stocks started with gains as the third-quarter earnings season continues apace.
"With the outlook for a top-line revenue growth positive for the coming week we continue to be positive on the outlook for equity markets," said strategists at Dolmen Securities. They regard any short-term weakness as a "good buying opportunity."
The leaderboard featured fund manager Schroders , which climbed 5%; metals giant Anglo American , which climbed 4.7%; and commercial real state group British Land , which added 4%.
Banking giant HSBC Holdings (HBC) rose 2.3% after Goldman Sachs said the bank may trade on 2 times book in 2010 instead of the current 1.58.
The broker expects stabilized or diminishing losses at Household, robust global banking and markets, stable credit costs and expansion in China.
But Royal Bank of Scotland weakened 0.2% and Lloyds Banking Group dipped 1.2%. Lloyds is still struggling to escape the government's asset-protection plan, and the U.K. Treasury said a potential windfall tax for banks is a possibility though not presently being considered.
Exchange-rate moves gave Bunzl a boost in the third quarter, the distribution and outsourcing firm said, and its shares were up 2.5%.
The firm said that overall trading has been consistent with its expectations in the third quarter, with revenue rising 8% due to the positive impact of exchange rate moves.
Bunzl said talks are continuing over a number of potential acquisitions but added that "the difference in the company's price expectations and those of prospective sellers continues to be an impediment to finalizing transactions."
Shares of bus-and-rail operator National Express jumped 10.5% outside the top index, taking back a portion of losses made last week when a consortium led by CVC Capital Partners pulled out of buying the firm.
Stagecoach Group , up just 0.61%, said that it submitted a letter on Oct. 16 indicating it would be prepared to enter into talks over a possible combination of Stagecoach and National Express. Stagecoach said that it was invited to submit the letter by National Express.
Shares of bookmaker William Hill jumped 10.2%.
The group said gross win in its stores was down 11%, largely due to unfavorable soccer results through August and September, though the company said margins returned to more normal levels in October.
"There has been a reassuring smidgen of mean-reversion in sporting results, the roll out of new fixed odds betting terminals promises some insulation against a weaker economy next year, and management can still talk reassuringly about the prospects for the online business once the acquisitions have bedded in," said analysts at Evolution Securities.
Peer Ladbrokes rose 4.8%.
Yule Catto shares jumped 19.7%. The chemicals group said that its third-quarter performance exceeded board expectations with pretax profit now well ahead of the year-earlier period.
"Following the strong third-quarter performance of the group, the board now expects full-year underlying profit before tax for the group to substantially exceed 2008," it said.
Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274