U.K. Stocks Climb, Led By Travel Companies, Retailers on Oil

By Sarah Thompson and Sarah Jones

Sept. 2 (Bloomberg) -- U.K. stocks rose after a slump in crude oil boosted the earnings prospects for travel-related companies and retailers. Carnival Plc, the world's largest cruise line operator, and Next Plc advanced.

Taylor Wimpey Plc led banks and homebuilders higher after Prime Minister Gordon Brown suspended a homebuyer tax and proposed spending 1 billion pounds ($1.8 billion) to help reverse Britain's worst housing slump in at least 18 years.

The FTSE 100 Index rose 15.2, or 0.3 percent, to 5,618 at 11:37 a.m. in London. The measure earlier fell as much as 0.5 percent. The FTSE All-Share Index gained 0.4 percent. Ireland's ISEQ Index added 3.4 percent.

``The drop in the oil price is having a big effect on the market,'' said James Hughes, a London-based analyst at CMC Markets. Homebuilders are also getting a boost ``from Brown's measures. We are seeing some much needed upside for the sector.''

Carnival climbed 4.4 percent to 1,975 pence. British Airways Plc, Europe's third-largest airline, rallied 6.3 percent to 278.25 pence. Next Plc, the U.K.'s second-largest fashion retailer, added 6.2 percent to 1,139 pence.

Crude oil traded near its lowest in five months as producers and refiners prepared to restart output at facilities after Hurricane Gustav passed the U.S. Gulf Coast without causing major damage to offshore platforms.

Taylor Wimpey Plc, the U.K.'s largest housebuilder, jumped 9.4 percent to 61.25 pence after the British Prime Minister suspended a homebuyer tax and proposed spending 1 billion pounds sooner than planned, to help people buy new homes and support those struggling to pay their mortgages.

Rival homebuilder Persimmon Plc surged 9.5 percent to 422 pence. Barratt Developments Plc gained 6.6 percent to 166.25 pence.

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

Asos Plc (ASC LN) lost 10.75 pence, or 2.6 percent, to 406.75. The U.K.'s second-largest online clothes retailer was cut to ``hold'' from ``buy'' at Citigroup Inc.

BowLeven Plc (BLVN LN) soared 32 pence, or 13 percent, to 285. The U.K. company that explores for oil and natural gas in Cameroon said the discovery at its Etinde Permit IF-1r well holds at least 76 million barrels of oil and as much as 249 million barrels.

Dechra Pharmaceuticals Plc (DPH LN) gained 16.5 pence, or 3.9 percent, to 438.75. The U.K.'s third-biggest veterinary drugs and services company reported full-year revenue of 304.4 million pounds and said it's ``confident'' for the future.

Premier Oil Plc (PMO LN) dropped 83 pence, or 6.9 percent, to 1,127 after Royal Bank of Scotland Group Plc lowered its recommendation for the U.K. explorer to ``hold'' from ``buy'' and cut its share price estimate to 1,290 pence from 2,015 pence.

Serica Energy Plc (SQZ LN) added 0.75 pence, or 1.1 percent, to 70 pence. The London-based energy explorer with projects in Europe and Southeast Asia said RWE AG will help finance oil and natural-gas exploration in an area off the west coast of Ireland.

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