U.K. Stocks Climb for Second Day; Xstrata, Shell, BP Lead Gains

By Sarah Jones

Oct. 20 (Bloomberg) -- U.K. stocks rose for a second day after a rally in base metals and oil prices boosted shares of commodity producers.

Xstrata Plc, the fourth-largest copper producer, and Royal Dutch Shell Plc climbed at least 3.2 percent as copper rebounded from a three-year low and crude oil advanced. Prudential Plc surged 12 percent after The Sunday Times said it is in advanced talks to sell investors a 20 percent stake.

The FTSE 100 Index gained 94.96, or 2.3 percent, to 4,157.97 at 11:47 a.m. in London. The FTSE All-Share Index added 2 percent and Ireland's ISEQ Index increased 2.7 percent.

The benchmark index climbed 3.3 percent last week as European leaders agreed to guarantee new bank debt and money- market rates declined. The FTSE is still down 36 percent this year as credit losses and asset writedowns at financial firms worldwide reached $660 billion.

``The long term story for commodities remains in tact, in terms of demand for metals,'' said Richard Hunter, head of U.K. Equities at Hargreaves Lansdown Stockbrokers in London. ``The market is looking a bit perkier today. We are not out of the woods yet but this is probably a bit of a relief rally.''

Xstrata increased 3.2 percent to 980.5 pence after copper climbed in London as a lower dollar spurred demand for the metal from buyers using other currencies. Lead also advanced.

Anglo American Plc, the world's fourth-biggest diversified mining company, added 3.2 percent to 1,337 pence. BHP Billiton Ltd., the largest, jumped 5 percent to 940.5 pence.

Copper rose 3.9 percent in Shanghai and advanced as much as 2.9 percent in London.

Shell, BP Advance

Shell, Europe's largest oil company, added 5.4 percent to 1,477 pence. BP Plc, the second-biggest, increased 6.3 percent to 458.75 pence. BG Group Plc, the U.K.'s third-largest oil and natural-gas producer, increased 5.4 percent to 762.5 pence.

Crude oil rose for a second day in New York on speculation OPEC will lower output in an attempt to halt a slide in prices, which have fallen more than 50 percent from July's record.

Prudential jumped 12 percent to 303 pence after the Sunday Times reported it is in advanced talks with investment funds in China and the Middle East to take a 20 percent stake in the U.K.'s second-biggest insurer and help finance a $15 billion offer for the Asian business of American International Group Inc.

The newspaper did not say where it got the information.

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

Barratt Developments Plc (BDEV LN) retreated 7.25 pence, or 11 percent, to 56. Taylor Wimpey Plc (TW/ LN) lost 1.25 pence, or 10 percent, to 10.75. Collins Stewart rated the homebuilders ``sell'' in new coverage saying buyers are unlikely to return in new large numbers until prices fall by ``at least'' 30 percent.

Cable & Wireless Plc (CW/ LN) lost 5.1 pence, or 3.6 percent, to 137. The U.K.'s second-biggest phone company has postponed plans for splitting up its British and international businesses until next year because of the economic climate, the Sunday times reported, without saying where it got the information.

JJB Sports Plc (JJB LN) soared 4.25 pence, or 13 percent, to 37. The second-largest U.K. sporting goods retailer said it raised 3.4 million pounds ($5.9 million) by selling a 5 percent stake to larger competitor Sports Direct International Plc (SPD LN). Separately, The Sunday Telegraph reported JJB may consider selling its chain of fitness clubs worth 100 million pounds.

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