Bloomberg: U.K. Shares Fall, Led by WPP, as Oil Rises; Shell Advances: “Royal Dutch/Shell Group was raised to ``buy'' from ``neutral'' by Merrill Lynch because of possible future asset sales and planned investments.” (ShellNews.net)

Aug. 20 (Bloomberg) -- The U.K.'s FTSE 100 Index fell, paced by WPP Group Plc shares as oil traded near a record high, reigniting concern that energy costs will hurt corporate growth.

The benchmark FTSE 100 slipped 8.7, or 0.2 percent, to 4353.90 as of 10:49 a.m. in London. The index has risen 1.2 percent since last Friday, and is heading for its first weekly gain in three. The FTSE All-Share Index fell 4.02, or 0.2 percent, to 2162.91.

``In a week that the equity market has managed to make some ground while oil prices have kept moving inexorably higher, that tells you that there is a degree of complacency creeping in,'' said Grahame Exton, part of a team managing the equivalent of about $921 million at Tilney Investment Management in Liverpool, England.

Crude-oil futures rose to as much as $48.98 a barrel in New York, its highest intraday price since oil began trading in that market in 1983, amid concern Iraqi exports may drop.

WPP, the world's second-largest advertising and marketing company, dropped 13 pence, or 2.6 percent, to 481.5 after Chief Executive Martin Sorrell said ``concerns remain'' about prospects for the U.S. economy after November's presidential elections. The company earlier said first-half profit rose 11 percent, boosted by demand in the U.S. and Asia.

``There's a hint of caution when you trawl through WPP's earnings statement,'' said Exton.

Shell Transport & Trading Co., which owns 40 percent of Royal Dutch/Shell, advanced after analysts at Merrill Lynch & Co. advised investors to buy the shares.

Shell gained 2 pence, or 0.5 percent, to 398. Royal Dutch/Shell Group was raised to ``buy'' from ``neutral'' by Merrill Lynch because of possible future asset sales and planned investments.

Disposals could reach $15 billion through 2005, Merrill Lynch said in a note to investors.

The following stocks are making significant gains or losses in London. Symbols are in parentheses after the company name.

British Airways Plc (BAY LN), Europe's second-largest airline, slipped 0.75 pence, or 0.4 percent, to 213. The airline is resuming pay talks with unions as the carrier tries to avert strikes by 11,000 baggage handlers and check-in staff next week.

``The discussions have been positive. We've made significant progress,'' a spokeswoman for British Airways said after talks were adjourned yesterday.

Feedback Plc (FDBK LN), a maker of training software used by schools and factories, slumped 6.5 pence, or 43 percent, to 8.5. The company said it made a loss compared with a year-earlier profit after it sold unprofitable units and sales outside the U.K. fell.

The net loss for the year ended March 31 was 2.21 million pounds, or 19.27 pence a share, from net income of 138,800 pounds, or 0.34 pence, a year-earlier.

FirstGroup Plc (FGP LN), the U.K.'s second-largest bus and train company, added 0.75 pence, or 0.3 percent, to 295.5 after it signed a seven-year contract to run the Scottish Passenger Rail franchise.

The U.K.'s Strategic Rail Authority will provide a 1.9 billion-pound subsidy for the franchise, which comes into effect on Oct. 17, the authority said.

Quarto Group Inc.(QRT LN), the publisher of more than 5,000 book titles in 35 languages, rose 2 pence, or 1.2 percent, to 170. The company posted a 14 percent rise in first-half net income, following a rise in profit in the U.S. which accounts for 60 percent of sales.

Rentokil Initial Plc (RTO LN), the world's biggest pest- control business, fell 0.5 pence, or 0.3 percent, to 153.25. Its shareholders want an explanation as to why the company won't sell its conferences and parcels delivery businesses after reports it had received approaches for them, the Financial Times reported, citing shareholder State Street Global Advisors.

Rexam Plc (REX LN), the world's largest beverage can maker, added 5.5 pence, or 1.3 percent, to 419.5 after it was upgraded to ``buy'' from ``neutral'' by analysts at Merrill Lynch.

T. Clarke Plc (CTO LN), an electrical-engineering contractor with clients such as the London Stock Exchange Plc and Bank of America Corp., slipped 12.5 pence, or 2.6 percent, to 473.5. The company said first-half profit fell by half after business declined in southeast England.

Net profit fell to 1.88 million pounds, or 14.47 pence a share, from 4.1 million, or 31.68 pence. Sales fell 8.5 percent to 71.2 million pounds because of ``reduced activity'' and lower prices in London and the south east, the company said in a statement.

To contact the reporter on this story:

Stephen Cunningham in London at  scunningha10@bloomberg.net.

To contact the editor responsible for this story:

Daniel Tilles at  dtilles@bloomberg.net.

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