U.K.’s FTSE 100 Index Climbs for Seventh Day; BP Shares Rally

June 17 (Bloomberg) -- U.K. stocks rose for a seventh day, the longest streak of gains since July 2009, after BP Plc agreed to cancel its dividend and set up a $20 billion fund to compensate victims of the worst spill in U.S. history.

BP soared 6.7 percent. Game Group Plc dropped 5.6 percent as the U.K.’s biggest electronic-games retailer said revenue declined. Fresnillo Plc led a decline in mining stocks, falling 2.8 percent.

The benchmark FTSE 100 Index advanced 15.97, or 0.3 percent, to 5,253.89. The gauge remains 50 percent higher than in March 2009 amid signs the global economy is recovering. Still, the index has fallen 9.8 percent from this year’s high on April 15 on concern that Europe’s debt crisis will hurt the economic recovery and as BP lost more than a third of its value following the oil spill. The FTSE All-Share Index rose 0.3 percent and Ireland’s ISEQ Index gained 0.1 percent today.

“The setting up of a $20 billion claims response fund and a cut in the dividend has clarified two of the most important issues which have been overhanging the shares” of BP, Gordon Gray, a London-based analyst at Collins Stewart, wrote in a report today, recommending that investors buy the shares.

BP climbed 6.7 percent to 359.7 pence. The London-based slashed its $10 billion-a-year dividend and agreed to create an escrow fund to pay damages from Gulf of Mexico spill following a meeting between Chairman Carl-Henric Svanberg and U.S. President Barack Obama yesterday.

Game Group sank 5.6 percent to 83.35 pence. The retailer said sales at stores open at least a year fell 12 percent in the 19 weeks ended June 12.

Fresnillo, the world’s largest primary silver producer, slid 2.8 percent to 1,025 pence. Eurasian Natural Resources Corp., a Kazakh metal producer, slipped 2.3 percent to 1,042 pence. Xstrata Plc declined 2.4 percent to 1,010.5 pence.

WS Atkins Plc declined 4.2 percent to 695.5 pence after saying full-year revenue fell to 1.39 billion pounds.

Bodycote Plc climbed 4.3 percent to 204.9 pence as Arbuthnot Securities Ltd. upgraded the shares to “buy” from “neutral.”

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

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.