U.K. Stocks Rise, Led by Shell and BP on Oil Price; BG Advances

By Sarah Thompson

Aug. 11 (Bloomberg) -- U.K. stocks advanced the most in almost a week, led by Royal Dutch Shell Plc and BP Plc as crude rose from a 14-week low in New York and BG Group Plc discovered oil in the North Sea.

The FTSE 100 Index added 42.9, or 0.8 percent, to 5,532.1 at 12:42 p.m. in London. The FTSE All-Share Index gained 0.8 percent and Ireland's ISEQ Index increased 2.7 percent.

Shell, Europe's largest oil company, climbed 1.8 percent to 1,778. BP, the second-biggest, advanced 1.6 percent to 527.75.

Oil prices climbed from a 14-week low in New York on concern the Russia-Georgia conflict may disrupt crude supplies from the Caspian Sea.

Crude rebounded after five days of clashes in Georgia threatened alternative export routes from Azerbaijan needed because of a pipeline fire. Prices also gained as some traders deemed last week's 7.9 percent drop as excessive.

BG increased 1.2 percent to 1,103. The U.K.'s third-largest oil and natural-gas producer found oil in an exploration well in the northern North Sea, the Norwegian Petroleum Directorate said.

Royal Bank of Scotland Plc gained 2.3 percent to 246 after it was upgraded by Societe Generale, which cited lower-than- estimated credit-market losses and integration costs at the bank, the U.K.'s second largest.

The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.

U.K. companies:

Aquarius Platinum Ltd. (AQP LN) climbed 18.25 pence, or 4.3 percent, to 443.25. The miner of the metal in South Africa was raised to ``buy'' from ``neutral'' at UBS AG, which noted the share price's 50 percent fall since its peak in mid-May and Xstrata Plc's proposed offer for Lonmin Plc.

DSG International Plc (DSGI LN) jumped 1.25 pence, or 2.3 percent, to 56.25. The U.K.'s biggest consumer-electronics retailer hired Citigroup Inc. to review its Italian and Spanish operations, with a view to selling the electrical goods retailers, the Sunday Telegraph said, without saying where it got the information.

International Personal Finance Plc (IPF LN) dropped 12 pence, or 3.7 percent, to 313.5. The U.K. bank that makes unsecured loans to low-income households overseas was lowered to ``neutral'' from ``buy'' at Merrill Lynch & Co., which said ``although we are very comfortable with IPF's funding, we believe that this could become a focus point in six months time.''

Mapeley Ltd. (MAY LN) slid 4 pence, or 0.4 percent, to 1,014. The real estate investment company controlled by Fortress Investment Group LLC reported a second-quarter net loss of 25.6 million pounds from a 17.2 million pound profit and said market conditions remain ``challenging.''

Irish Companies:

Paddy Power Plc (PWL ID). Ireland's largest betting-shop owner, fell 90 cents, or 5.2 percent, to 16.5 euros. Competitor Ladbrokes Plc restated first-half figures to show that its local winnings declined.

``Concern regarding the deteriorating retail environment in Ireland, combined with an over-supply of Irish bookmaker shops, will rise as a result'' of the announcement, David Jennings, an analyst at Davy Stockbrokers in Dublin, wrote in a note. ``It will be of particular concern to holders of Paddy Power.''

Smurfit Kappa Group Plc (SKG ID) added 30.8 cents, or 6.8 percent, to 4.818 euros. Europe's largest maker of cardboard boxes said second-quarter profit more than doubled on lower finance costs.

To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net.