U.K. Stocks Advance, Extending Biggest Annual Rally Since 1997

By Adam Haigh

Dec. 22 (Bloomberg) -- U.K. stocks rose, with the benchmark FTSE 100 Index extending its biggest annual rally since 1997, as higher crude prices pushed oil producers higher.

Homebuilders Barratt Developments Plc and Taylor Wimpey Plc both rallied more than 2 percent after Goldman Sachs Group Inc. advised buying the shares. Royal Dutch Shell Plc and BP Plc, Europe’s largest oil companies and which together make up more than 16 percent of the FTSE 100 by weighting, climbed as crude traded above $73 a barrel.

The FTSE 100 index gained 24.91, or 0.5 percent, to 5,318.9 as of 8:19 a.m. in London, extending this year’s 20 percent rally. The benchmark gauge has rebounded 51 percent since March as central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy. The FTSE All-Share Index added 0.4 percent today and Ireland’s ISEQ Index advanced 1.6 percent.

Barratt Developments gained 4.1 percent to 118.7 pence and Taylor Wimpey climbed 2.3 percent to 35.12 pence. Goldman Sachs raised its recommendations to “buy” from “neutral.”

Shell, Europe’s largest oil company, advanced 0.6 percent to 1,846 pence. BP, the region’s second-biggest, added 0.8 percent to 595.6 pence.

Oil traded above $73 a barrel as Saudi Arabia’s Oil Minister Ali al-Naimi said yesterday that OPEC, which pumps 40 percent of the world’s oil, will “absolutely not” change its output quotas.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.