U.K. Stocks Advance; BP, Rio Tinto, Royal Bank of Scotland Gain
U.K. stocks climbed by the most in three weeks, led by commodity producers as crude oil and metal prices advanced.
BP Plc and Royal Dutch Shell Plc, Europe’s two largest oil companies, rallied more than 3 percent as crude rose for a second day. Rio Tinto Group and Anglo American Plc advanced at least 5.5 percent on higher metal prices. Royal Bank of Scotland Group Plc surged 14 percent on speculation the bank will retain its insurance business.
The benchmark FTSE 100 Index rose 102.76, or 2.4 percent, to 4,319.35, its biggest gain since Dec. 8. The FTSE All-Share Index gained 2.2 percent. Ireland’s ISEQ Index lost 0.3 percent.
“The oil price and raw material prices have developed positively and are helping stocks,” said Heino Ruland, an equity strategist at FrankfurtFinanz Partner in Frankfurt, Germany. “Classic year-end window dressing is adding to the highs.”
The FTSE 100 is still down 33 percent this year and is headed for it’s worst annual drop on record after more than $1 trillion in global losses and writedowns at financial firms froze credit markets and eroded profits.
BP, Europe’s second-largest oil company, added 3.7 percent to 514.25 pence. Shell gained 3.2 percent to 1,771 pence. Europe’s biggest oil company has restarted a unit, which broke down in mid-November, at its Scotford upgrader which injects hydrogen into the tarlike crude it mines from Canadian oil sands.
Crude oil for February delivery rose as much as 12 percent to $42.20 a barrel in New York after Israeli air strikes in the Gaza strip raised concerns that supply may be disrupted from the Middle East, the world’s largest producing region.
Military Junta
Rio Tinto surged 5.5 percent to 1,450 pence. The world’s third-largest mining company will initiate talks with Guinea’s new rulers after the military junta that seized power last week said all mining contracts would be canceled. Rio has rights to part of the Simandou iron ore deposit in Guinea.
Anglo American, the mining company that controls the world’s largest platinum producer, increased 6.1 percent to 1,506 pence. BHP Billiton Plc, the world’s biggest mining company, rose 4.1 percent to 1,243 pence.
Kazakhmys Plc, Kazakhstan’s biggest copper producer, rallied 5.6 percent to 232.75 pence. Antofagasta Plc, the copper producer controlled by Chile’s Luksic family, gained 2.5 percent to 413.75 pence.
Copper climbed from the lowest in four years in London as a weaker dollar buoyed the appeal of commodities as an alternative investment to the U.S. currency.
Middle East Fighting
Gold rose to a two-month high in London as the fighting in the Middle East spurred demand for the metal as a haven. Silver and platinum also gained.
RBS soared 14 percent to 48.7 pence. The bank 58 percent owned by the U.K. government after a bailout is considering abandoning the 7 billion-pound ($10.3 billion) sale of its insurance unit, the Sunday Times reported, citing unidentified people.
Imperial Energy Plc rose 1 percent to 1,030 pence. The U.K. explorer operating in Siberia is approaching the 90 percent level of acceptances needed for its takeover by ONGC Videsh, part of India’s Oil & Natural Gas Corp., the Financial Times reported, without saying where it got the information.
Imperial Energy shareholders have until 1 p.m. London time tomorrow to accept the offer of 12.50 pounds a share, the FT said.
The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.
Panmure Gordon & Co. (PMR LN) slipped 2.3 percent to 21 pence. The stockbroker said reorganization costs, “difficult” markets, lower investment-banking revenue and recent trading losses will hurt results this year.
Sibir Energy Plc (SBE LN) rallied 23 percent to 110.25 pence. The oil and gas producer bought an 18.36 percent stake in Mosnefteprodukt, a closely held distributor of refined oil products, for $34.9 million, increasing its total holding in the company to more than 69.94 percent.
