July 29 (Bloomberg) -- U.K. stocks rose as Morgan Stanley advised buying Schroders Plc and mortgage approvals climbed to a 14-month high in June amid optimism the worst of the recession has past.

Schroders, the U.K.’s largest independent money manger, climbed 4.6 percent as Morgan Stanley raised the shares to “overweight.” Inchcape Plc soared 18 percent after the global operator of car dealerships reported earnings that Arden Partners Ltd. said were “well ahead” of expectations.

The benchmark FTSE 100 Index added 18.69, or 0.4 percent, to 4,547.53, resuming gains after the first drop in 12 days yesterday. The measure has surged 10 percent since July 10 after companies from Goldman Sachs Group Inc. to Roche Holding AG and Apple Inc. posted results that exceeded estimates and U.S. Federal Reserve Chairman Ben S. Bernanke said the world’s largest economy is showing “tentative signs of stabilization.”

The FTSE All-Share Index added 0.4 percent today and Ireland’s ISEQ Index gained 0.2 percent at 4:41 p.m. in Dublin.

Recent corporate news, “while not great, is better than expected,” Jan Loeys, global head of market strategy at JPMorgan Chase & Co., said in a Bloomberg Television interview.

Banks granted 47,584 home loans, compared with 44,169 in May, the Bank of England said today in London. Economists predicted 47,000, according to the median of 21 forecasts in a Bloomberg News survey.

Schroders

Schroders added 4.6 percent to 951 pence. Morgan Stanley raised its recommendation to “overweight” from “underweight” and increased its price estimate 47 percent to 1,045 pence, saying that market consensus forecasts for earnings are too low.

Inchcape rallied 18 percent to 26.5 pence. Arden Partners analyst Tim Richmond said the earnings were “well ahead” of expectations and he raised he recommendation on the shares to “add” from “neutral.”

Morgan Crucible Co., which provides body armor to the U.K. Ministry of Defence, soared 9.2 percent to 119 pence after Chief Executive Officer Mark Robertshaw said “there are some signs of a stabilization in order books and sales levels in recent weeks in certain sectors.”

Rexam Plc, the world’s biggest beverage-can maker, sank 8.1 percent to 253.75 pence after saying it will raise about 351 million pounds ($575 million) in a share sale to keep an investment-grade rating and scrapped its first-half dividend to save cash.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.

Last Updated: July 29, 2009 11:46 EDT