European Stocks Advance, Led by Ryanair, Daimler; RBS Climbs

By Adria Cimino

Aug. 8 (Bloomberg) -- European stocks rose, capping their weekly advance, as declines in oil and metals sent airlines, carmakers and retailers higher.

Ryanair Holdings Plc, Europe's largest discount carrier, Daimler AG and Carrefour SA climbed as oil slipped more than $2 a barrel and copper fell to a six-month low. Royal Bank of Scotland Group Plc jumped to a seven-week high on a smaller loss than analysts estimated.

``We were waiting for a decline in the oil price, which had been asphyxiating the economy,'' said Alexandre Iatrides, a fund manager at Richelieu Finance in Paris, which oversees $6.2 billion. ``RBS shares today illustrate investors' renewed confidence in the industry.''

Europe's Dow Jones Stoxx 600 Index added 0.7 percent to 288.93 at 3:15 p.m. in London, extending this week's advance to 3.1 percent. Stocks headed for the third weekly gain in four weeks as Royal Bank joined BNP Paribas SA and Societe Generale SA in posting earnings that topped analysts' estimates.

Shares pared their advance after Fannie Mae, the largest U.S. mortgage-finance company, had its fourth straight quarterly loss and cut its dividend. Stocks rebounded, following gains in early U.S. trading.

The Stoxx 600 has dropped 21 percent this year on concern credit losses nearing $500 billion worldwide, accelerating inflation and record oil prices will stifle economic and profit growth. Bradford & Bingley, Taylor Wimpey Plc and Yell Group Plc have led the retreat, losing more than 75 percent of their market value.

European Aeronautic Defence & Space Co. and BAE Systems Plc gained today as the dollar rose against the euro and the pound.

National Markets

National benchmark indexes declined in 11 of the 18 western European markets. France's CAC advanced 0.1 percent, while Germany's DAX decreased 0.3 percent. The U.K.'s FTSE 100 slipped 0.3 percent, dragged lower by BHP Billiton Ltd. and Vodafone Group Plc.

Ryanair increased 6.9 percent to 2.73 euros. Air France, Europe's biggest airline, advanced 4.2 percent to 18.17 euros.

Carrefour, the world's second-largest retailer, climbed 2.5 percent to 35.76 euros. DSG International Plc, the U.K.'s biggest consumer-electronics retailer, jumped 6.6 percent to 52.75 pence.

Crude for September delivery fell as much as $2.97, or 2.5 percent, to $117.05 a barrel on the New York Mercantile Exchange. Prices have retreated 6 percent this week.

Oil, Metals Retreat

Oil headed for its fourth decline in five weeks as demand fell and the dollar gained, reducing the appeal of commodities as an inflation hedge. A stronger dollar also boosts the value of sales in the U.S. currency when converted into euros and pounds, benefiting EADS and BAE Systems.

Daimler, the world's second-biggest maker of luxury cars, jumped 3.5 percent to 41.61 euros, and Bayerische Motoren Werke AG, the largest luxury-car maker, increased 4.8 percent to 28.94 euros.

EADS, which controls planemaker Airbus SAS, climbed 7.4 percent to 14.59 euros. EADS makes most of its sales in dollars. BAE, Europe's largest defense company, increased 2.2 percent to 472 pence. BAE Systems makes 44 percent of sales in the U.S. and Canada.

The euro slumped to a five-month low against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy slows. It reached $1.5106 today after closing at $1.5325 yesterday in New York.

Copper slid in London, heading for a sixth straight weekly drop, on signs a slower global economy may curb demand for industrial metals. Aluminum and zinc also fell.

Royal Bank of Scotland, the U.K.'s second-biggest bank, gained 2.7 percent to 239 pence. The bank posted a smaller loss than analysts estimated and said the 5.9 billion pounds ($11.4 billion) of writedowns it announced in April may be sufficient for the year.

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