U.K. Stocks Advance, Led by Energy Producers, on China Package

By Sarah Thompson

Nov. 10 (Bloomberg) -- U.K. stocks rose for a second day, led by energy producers, after China unveiled a $586 billion plan to stimulate the world's biggest contributor to economic growth, and oil and copper prices rallied.

BP Plc, Europe's second-largest oil company, and Rio Tinto Group, led the advance. British Airways Plc jumped more than 9 percent after Royal Bank of Scotland Group Plc recommended investors buy shares in Europe's third-biggest carrier.

The FTSE 100 Index added 135.90, or 3.1 percent, to 4,500.86 at 9:35 a.m. in London. The FTSE All-Share Index increased 3 percent and Ireland's ISEQ Index rose 4.6 percent.

China, the world's fourth-largest economy, has joined governments and central banks from Washington and Tokyo to Frankfurt and London by lowering borrowing costs and injecting cash to avert recession and unlock credit markets.

``This is a strong sign from Chinese authorities that they are dedicated to promoting growth,'' said Alan Borrows, who helps oversee 1.1 billion pounds at Midas Capital Partners in Liverpool, England. ``The clear beneficiaries are the mining companies as many investors had worried that the slowdown in the Chinese economy would be detrimental to their earnings prospects into 2009.''

BP added 3.9 percent to 535 pence. Royal Dutch Shell Plc, Europe's largest oil company, increased 4.7 percent to 1,758 pence.

Crude oil and copper rose more than 5 percent after China announced the stimulus package that may spur economic growth and demand for raw materials.

Rio Tinto, the world's third-largest mining company, climbed 12 percent to 2,923 pence. BHP Billiton Ltd., the biggest, advanced 11 percent to 1,127 pence.

British Airways Jumps

BA jumped 9.1 percent to 159.3 pence after the shares were raised to ``buy'' from ``sell' at RBS.

``We have greater optimism than most regarding BA's key strategic moves relating to antitrust immunity'' with American Airlines Inc. and the planned merger with Iberia Lineas Aereas de Espana SA, analysts Andrew Lobbenberg and Christian Cowley wrote in a research note dated today.

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

U.K. companies:

AstraZeneca Plc (AZN LN) gained 74 pence, or 2.8 percent, to 2,758. The drugmaker's Crestor slashed the risk of heart attack, stroke and death by nearly half in people with normal or low cholesterol in a study, potentially opening a way to save the lives of thousands of seemingly healthy people.

Cable & Wireless Plc (CW/ LN) added 7.9 pence, or 5.9 percent, to 142.6. The U.K.'s second-biggest phone company raised the full-year forecast for operating profit as the company's international business had ``one of its best results in a long time.''

HSBC Holdings Plc (HSBA LN) slid 8.5 pence, or 1.1 percent, to 738. Europe's biggest bank set aside a more-than-estimated $4.3 billion to cover bad loans in the U.S. and forecast ``further deterioration.''

JKX Oil & Gas Plc (JKX LN) increased 16.25 pence, or 8.8 percent, to 200. The U.K. energy exploration company connected its gas production in Ukraine to the Soyuz pipeline, removing constraints on supplies.

Kier Group Plc (KIE LN) added 49.5 pence, or 7 percent, to 755. The U.K. company that helped build the Channel Tunnel said its financial performance to date is meeting company targets.

Lloyds TSB Group Plc (LLOY LN) gained 1.25 pence, or 0.6 percent, to 201.75. The U.K. bank that agreed to buy HBOS Plc in a government-backed rescue plans to sell U.K. government- guaranteed bonds in euros and pounds, according to a banker involved in the transaction.

Majestic Wine Plc (MJW LN) lost 9 pence, or 6.1 percent, to 139. The owner of the U.K.'s largest chain of wine warehouses said Christmas sales will be ``challenging'' after a drop in same-store revenue more than doubled at the start of its second half.

Taylor Wimpey Plc (TW/ LN) jumped 1.5 pence, or 11 percent, to 15.5. TDR Capital LLP, a private equity firm, may inject cash into U.K. homebuilder Taylor Wimpey in exchange for shares, the Mail on Sunday reported, without saying where it got the information.

TUI Travel Plc (TT/ LN) gained 7.65 euros, or 3.9 percent, to 203.75. Europe's largest tour operator will prepare for a slowing economy by scaling down its capacity in Germany and raising prices, Reuters reported.

Irish companies:

DCC Plc (DCC ID) added 42 cents, or 3.4 percent, to 12.88 euros. The Irish distributor of goods from computer games to fuel reported a first-half profit without year-earlier costs for a legal battle with fruit distributor Fyffes Plc.

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