U.K. Shares Rise, Led by BP; FTSE 100 Heads for Monthly Gain

By Alexis Xydias

Aug. 29 (Bloomberg) -- U.K. stocks advanced for a third day, helping the benchmark FTSE 100 Index extend its first monthly gain since April. Energy companies BP Plc and Cairn Energy Plc climbed as crude oil rose.

The FTSE 100 added 22.20, or 0.4 percent, to 5,623.4 at 11:57 a.m. in London. The index has risen 2.1 percent this week and is poised for a monthly gain of 3.9 percent, the best- performing equity market among the world's largest 20.

The benchmark dropped more than 11 percent in the previous three months as concern over a stagnant economy and a slump in commodity prices weighed on share prices.

``Although a respite has been provided in the market, the economy itself is far from breathing a sigh of relief,'' said Omer Bhatti, head sales trader at WorldSpreads Group Plc in London. ``More pain will be felt before we begin to see sound fundamentals that the markets can begin to believe are a true bottom of the recent cycle.''

The FTSE All-Share climbed 0.6 percent today, while Ireland's ISEQ Index increased 0.9 percent.

BP, Europe's second-largest oil company, rose 1.1 percent to 528 pence. Cairn Energy, the oil and gas explorer operating in India, added 2.3 percent to 2,923 pence. Crude oil headed for its biggest weekly gain in almost two months, rising 1.2 percent today, as producers evacuated rigs ahead of Gustav, forecast to become the worst Gulf of Mexico hurricane since Katrina.

Bloomsbury, Marshalls

Bloomsbury Publishing Plc added 3 percent to 170.75 pence. The U.K. publisher of the Harry Potter novels posted 42 percent higher first-half profit on sales in the U.K. and Germany and said it continues to seek acquisitions.

Marshalls Plc, the U.K.'s largest maker of natural stone and concrete landscaping products, fell 4.8 percent to 167 pence. Net income in the first half of the year decreased to 16.4 million pounds ($30 million) from 19.7 million pounds, the company said, on slumping domestic demand and rising energy costs.

New Star Asset Management Group Ltd. dropped 16 percent to 102.75 pence, the biggest retreat since January. The fund company set up by John Duffield said first-half profit slumped 70 percent as sales and assets under management slipped. The trading environment remains ``difficult,'' the company said.

The following stocks also rose or fell in London and Dublin. Stock symbols are in parentheses:

U.K. companies:

Derwent London Plc (DLN LN) fell 6 pence, or 0.6 percent, to 1,083, a third decline in four sessions. The office property developer reported a loss in the first half as the estimated value of the company's properties slumped by 164 million pounds.

Oxford BioMedica Plc (OXB LN) dropped 0.5 pence, or 4.3 percent, to 11.25 after the U.K. biotechnology company's Chief Executive Officer Mike McDonald left after less than two months in the job.

Petrofac Ltd. (PFC LN) rose 31 pence, or 5 percent, to 652. The U.K. oil services provider with projects in the Middle East and North Sea bought Caltec Ltd. for 15 million pounds to boost output.

Restaurant Group Plc (RTN LN) climbed 7.75 pence, or 5.9 percent, to 139.75. The U.K. owner of the Frankie and Benny's chain said first-half profit rose 25 percent on higher revenue.

Irish companies:

Grafton Group Plc (GN5 ID) tumbled 10 cents, or 2.5 percent, to 3.90 euros. Ireland's largest supplier of building materials said first-half profit fell by half on slowing construction demand in the U.K. and Ireland and predicted ``no immediate'' improvement.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.