Oct. 31 (Bloomberg) -- U.K. stocks advanced, led by retailers and travel companies, as oil prices headed for a record monthly decline.

Tesco Plc, the U.K.'s largest retailer, climbed 4.1 percent. Ryanair Holdings Plc, Europe's biggest discount carrier, gained 9.5 percent. BT Group Plc plunged 19 percent after the U.K.'s largest phone company said second- quarter earnings missed targets.

The FTSE 100 Index increased 86.18, or 2 percent, to 4,377.83 in London as 79 shares rose and 21 fell. The index pared its monthly drop to 11 percent, gaining 13 percent this week. The FTSE All-Share Index rose 2 percent today. Ireland's ISEQ Index added 8 percent as Independent News & Media Plc rose the most in more than 21 years. The FTSE fell 13 percent in September.

Crude oil fell, poised for its biggest monthly reduction since New York trading began in 1983, on concern that the contracting U.S. economy will curb fuel use in the world's largest energy consuming country. Oil is heading for a 36 percent drop this month.

The decline of oil ``is positive for the buying power of households,'' Jacques Tebeka, a fund manager at Edmond de Rothschild Multi Management in Paris, which oversees $4.2 billion, said in a Bloomberg Television interview.

Tesco added 4.1 percent to 339.4 pence. Ryanair climbed 9.5 percent to 2.73 pence.

BT plunged 19 percent to 115.1 pence. The company said earnings before interest, taxes, depreciation and amortization as well as earnings per share were ``slightly below expectations'' in the three months through September.

Independent News soared 28 percent to 64 cents. The publisher of the U.K.'s Independent newspaper said it received approaches for its stake in Australia's APN News & Media Ltd. The disposal of the 39.1 percent stake would reduce debt by about 800 million euros ($1 billion), the Irish company said.

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

ARM Holdings Inc. (ARM LN) sank 2.3 percent to 96.75 pence. Goldman Sachs Group Inc. cut its recommendation on shares of the U.K. designer of semiconductors used in Apple Inc.'s iPhone to ``neutral'' from ``buy.''

Barclays Plc (BARC LN) retreated 21 percent to 163 pence. The U.K.'s second-largest bank will raise 7.3 billion pounds ($11.8 billion) in a share sale to an investor group, including Abu Dhabi and Qatar, as it seeks to meet new U.K. cash-reserve targets without using the government's bailout fund.

Carnival Corp. (CCL LN) sank 14 percent to 1,355 pence. The world's biggest cruise-line company said it will suspend its dividend because of the ``highly volatile state of the financial markets.''

CSR Plc (CSR LN) jumped 6.1 percent to 203.75 pence. Goldman raised its recommendation on shares of the U.K. maker of microchips used in Nokia Oyj mobile phones to ``buy'' from ``sell.''

Kazakhmys Plc (KAZ LN), Kazakhstan's biggest copper producer, tumbled 5.2 percent to 285.5 pence. UBS cut the stock to ``sell'' from ``neutral.'' Deutsche Bank AG cut its recommendation on the shares to ``hold'' from ``buy.''

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

Last Updated: October 31, 2008 12:51 EDT