U.K. Stocks Advance; Standard Chartered, RBS Lead Gains

By Adria Cimino

Dec. 14 (Bloomberg) -- U.K. stocks climbed, led by financial shares, after Abu Dhabi provided $10 billion to avert a default by Dubai’s Nakheel PJSC.

Standard Chartered Plc, the U.K. bank that gets most of its profit in emerging markets, rallied 5.1 percent. Royal Bank of Scotland Group Plc also rose.

The benchmark FTSE 100 Index rose 55.63, or 1.1 percent, to 5,317.2 at 9:15 a.m. in London, gaining for a third day. The index has rebounded 51 percent since March and is heading for its biggest annual gain since 1997 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 increased 1 percent today and Ireland’s ISEQ Index added 0.9 percent.

Abu Dhabi provided $10 billion to help Dubai World, the state-owned holding company, meet its obligations, including $4.1 billion needed to repay an Islamic bond maturing today for the real-estate unit Nakheel PJSC.

Dubai will use the rest of the money to pay Dubai World’s contractors, suppliers, interest and operating costs until the company reaches a standstill agreement with its creditors, Dubai’s government said in an e-mailed statement today.

“The fact that they are offering $10 billion made some fears dissipate,” said Bill Ismail, a senior sales trader at City Index Ltd. in London. “Many people hope the rally will continue into the end of the year.”

Standard Chartered jumped 5.1 percent to 1,587 pence. The stock was raised to “outperform” from “neutral” at Credit Suisse Group AG.

RBS, the U.K. lender 70 percent-owned by the government, advanced 3.5 percent to 31.64 pence.

The following shares rose or fell in London. Stock symbols are in parentheses.

Mouchel Group Plc (MCHL LN) surged 27 percent to 241.5 pence, a record gain. The British road-maintenance company said it received two unsolicited approaches from VT Group Plc and rejected the bids as “wholly inadequate.”

PartyGaming Plc (PRTY LN) gained 2.1 percent to 262 pence, advancing for a third day. The owner of the PartyPoker.com online-gambling brand is in intermittent merger talks with Austria’s Bwin Interactive Gaming AG, the Sunday Times said, citing an unidentified person familiar with the matter.

Shanks Group Plc (SKS LN) added 3.9 percent to 135.1 pence. Covanta Holding Corp., a U.S. developer of waste-to-energy plants, may be considering a bid for Shanks Group following an approach by leveraged-buyout firm Carlyle Group, the Observer said, citing unidentified people.

Spice Plc (SPI LN) sank 13 percent to 62 pence, the biggest decline since February. The U.K.’s biggest reader of water meters posted a first-half loss after taking an impairment charge on its gas social housing unit.

Whitbread Plc (WTB LN) advanced 3.1 percent to 1,371 pence. The operator of the Premier Inn budget-hotel chain said it expects 2009/2010 results to exceed market estimates.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.