U.K. Stocks Advance, Led by RBS, Banks; BA Gains on Oil Price

By Sarah Jones

July 17 (Bloomberg) -- U.K. stocks climbed the most in more than a week as easing credit concerns sparked a rally in financial shares. Royal Bank of Scotland Group Plc, Britain's second-biggest bank, and Barclays Plc gained.

British Airways Plc and Kingfisher Plc led travel companies and retailers higher as oil had its biggest two-day drop since January 2007.

The FTSE 100 Index increased 87.2, or 1.7 percent, to 5,237.8 at 9:07 a.m. in London. The FTSE All-Share Index added 1.9 percent and Ireland's ISEQ Index jumped 3.9 percent, the biggest advance since March.

U.S. stocks rallied yesterday after higher-than-estimated profit at Wells Fargo & Co. sparked the biggest-ever gain in financial shares.

``We are a good way through finding out the depth of the credit crunch,'' said Gary Dugan, chief investment officer at Merrill Lynch Global Wealth Management for Europe. ``There are some things happening which are goods news'' such as the fall in the oil price.

RBS jumped 7.8 percent to 177.9 pence. Barclays, Britain's fourth-largest bank, climbed 5.5 percent to 281.5 pence. Lloyds TSB Group Plc, Britain's largest provider of checking accounts, added 4.9 percent to 298 pence.

British Airways, Europe's third-biggest airline, increased 4.7 percent to 235.75 pence. Carnival Plc, the world's largest cruise-line company, jumped 3.4 percent to 1,578 pence.

Crude oil for August Delivery fell for a third day in New York to less than $134 a barrel after tumbling almost 3 percent yesterday as U.S. inventories increased unexpectedly.

Kingfisher, the U.K.'s largest home-improvement retailer, increased 5.8 percent to 101.7 pence. Marks & Spencer Group Plc, Britain's biggest clothing retailer, added 3.8 percent to 248.75 pence.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.