Dec. 31 (Bloomberg) -- U.K. stocks climbed for a third day, trimming the FTSE 100 Benchmark Index’s worst annual decline on record, as commodity producers rallied.

BHP Billiton Plc, the world’s largest mining company, climbed 2.3 percent on speculation gold will continue to rise. Rio Tinto Group added 1.7 percent after saying it sold its stake in an aluminum smelter in China to a partner to help reduce debt. Vodafone Group Plc increased 2.7 percent after Credit Suisse Group AG issued a “trading buy” on the world’s largest mobile phone company.

The benchmark FTSE 100 Index rose 40.30, or 0.9 percent, to 4,432.98 at 9:37 a.m. in London. The FTSE All- Share Index gained 0.9 percent. Ireland’s ISEQ Index added 1.4 percent as Ryanair Holding Plc climbed.

The FTSE 100 has lost 31 percent this year as credit- related losses and writedowns at financial firms that topped $1 trillion pushed the U.S., Europe and Japan into the first simultaneous recessions since World War II.

Trading may be slower than normal today with the benchmark index closing at 12:30 p.m. for the New Year’s holiday.

BHP increased 2.3 percent to 1,307 pence. Gold may continue to rise in 2009 on speculation geopolitical tensions and a weaker dollar will boost demand for the metal as a haven.

Rio Tinto gained 1.7 percent to 1,472 pence. Qingtongxia Aluminium Co. will buy the world’s third- largest mining company’s 50 percent stake in the venture, Jim Singer, a Brisbane, Australia-based spokesman for London-based Rio Tinto, said without revealing the sale price.

Vodafone Gains

Vodafone increased 2.7 percent to 139.8 pence. The world’s largest mobile-phone company was given a “trading buy” at Credit Suisse, with the broker saying the decline in the value of the U.K. pound leaves “guidance and consensus beatable.”

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

U.K. companies:

Aberdeen Asset Management Plc (ADN LN) soared 7.4 percent to 112 pence. Scotland’s largest independent money manager agreed to buy fund assets from Credit Suisse for about 250 million pounds ($361 million).

Imperial Energy Plc (IEC LN) jumped 3.7 percent to 1,249 pence. Shareholders owning more than 90 percent of the stock of Imperial Energy backed a 1.4 billion-pound bid from India’s Oil & Natural Gas Corp.

Inchcape Plc (INCH LN) declined 4.5 percent to 37.25 pence. The global operator of car dealerships was cut to “hold’ from “buy” at Citigroup Inc., which cited “two profit warnings in two months.”. The brokerage also slashed its price estimate to 40 pence from 110 pence.

Irish companies:

Ryanair Holdings Plc (RYA ID) increased 8 cents, or 2.6 percent, to 3.13 euros. The Dublin-based carrier met Aer Lingus Group Plc (AERL ID) workers, who own about 14 percent of the company, to discuss its hostile bid for the airline, the Irish Times reported. Aer Lingus shares lost 2 percent to 1.50 euros.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.

Last Updated: December 31, 2008 04:52 EST