U.K. stocks including Unilever rose. The company gained the most in three years after announcing a share buyback.

British Energy Group Plc also advanced. Vodafone Group Plc and Royal Bank of Scotland Group Plc led declining shares.

Smith & Nephew Plc slid after the maker of orthopedic products said it’s discussing a merger with U.S. competitor Biomet Inc.

The FTSE 100 Index added 0.2 percent to 6163.30 at 12:32 p.m. in London, after earlier falling as much as 0.5 percent. The index moved higher even as 52 stocks declined. The FTSE All- Share Index also rose 0.2 percent, to 3156.40. Ireland’s ISEQ Index slipped 0.4 percent to 8593.99.

European Central Bank President Jean-Claude Trichet will probably indicate a December interest-rate increase while holding back on his intentions for 2007, economists said before the bank’s rate decision today.

“After the push of October when inflation worries almost seemed a distant memory, such concerns have crept back in with Trichet speaking today,” said Jamie Coleman, who helps oversee $600 million at EFG Wealth Management in London.

Britain’s FTSE 100 climbed 2.8 percent last month, its second straight advance and the biggest since March.

Stock Buyback

Unilever, the world’s second-largest maker of food and detergent, climbed 54 pence, or 4.2 percent, to 1,348. The company said it will repurchase 1.5 billion euros ($1.9 billion) in shares next year.

British Energy, whose power stations can produce about a fifth of the U.K.’s electricity, gained 8.5 pence, or 2 percent, to 441.5.

Vodafone dropped 1 pence, or 0.7 percent, to 134.5. The world’s biggest mobile-phone service provider denied a newspaper report that it’s in talks about selling a stake or partnering with Russian telecommunications company Altimo.

“There are no discussions ongoing between the two parties and there is no substance to Vodafone’s suggested interest,” Vodafone spokesman Ben Padovan said.

Royal Bank of Scotland, Britain’s second-biggest bank, retreated 17 pence, or 0.9 percent, to 1,862. Barclays Plc, the third-biggest by market value, decreased 4.5 pence, or 0.6 percent, to 701. Today is the start of a two-day presentation to investors in Johannesburg.

Merger Talks

Smith & Nephew, Europe’s biggest maker of orthopedic products, retreated 6.5 pence, or 1.3 percent, to 502.75 pence. The companies have held “very preliminary talks,” Smith & Nephew said in a statement. “No agreement has been reached, and there can be no assurance that any transaction will be proposed or completed.”

The possible merger would create a company with a fifth of the global market for artificial hips, knees and shoulders.

The following stocks also rose or fell today. Symbols are in parentheses after company names.

U.K. Companies:

Aegis Group Plc (AGS LN) rose 3 pence, or 2.3 percent, to 133.5. UBS AG raised its recommendation on shares of the world’s biggest independent buyer of advertising space to “buy” from “neutral,” saying that the company is “attractive to an acquirer.”

Amec Plc (AMEC LN) increased 3.75 pence, or 1 percent, to 379. The world’s third-biggest engineering-services company rejected an approach from Downer EDI Ltd., the Guardian said, citing the Australian engineering company.

Armour Group Plc (AMR LN) a U.K. maker of electronic products, climbed 4 pence, or 11 percent, to 39.5. The company said fiscal-year profit fell 27 percent after lower demand and rising raw-material costs made the company’s automotive division less profitable.

BG Group Plc (BG/ LN) climbed 7.5 pence, or 1.1 percent, to 680.5. The U.K.’s third-biggest natural-gas company said third- quarter profit rose 23 percent as production increased, including output from the Dolphin Deep field offshore Trinidad and Tobago.

Carphone Warehouse Group Plc (CPW LN), the largest European mobile-phone retailer, dropped 9.5 pence, or 3.2 percent, to 285. The company said first-half profit collapsed on the cost of providing broadband Internet access for customers at its TalkTalk fixed-line service.

Net income for the 26 weeks ended Sept. 30 fell to 691,000 pounds ($1.3 million) from 24.6 million pounds.

Innovation Group Plc (TIG LN), a maker of software for insurers, retreated 0.75 pence, or 2.5 percent, to 29.75 pence. It agreed to buy First Notice Systems Inc. for $51.6 million to increase the client base in the U.S.

J.D. Wetherspoon Plc (JDW LN), the operator of about 650 U.K. pubs, rose 31.25 pence, or 5.5 percent, to 596. The company said fiscal first-quarter sales climbed 9.2 percent at pubs open at least a year as refurbished outlets, expanded food menus and smoke-free properties drew more customers.

The shares climbed to a record as analysts at Panmure Gordon & Co. Ltd., Dresdner Kleinwort and Numis Securities raised recommendations on the stock.

“These are remarkably good figures,” Mark Brumby, an analyst at Oriel Securities, said today in an e-mailed note.

Land of Leather Holdings Plc (LAN LN) gained 4.75 pence, or 1.7 percent, to 277.25. The U.K.’s second-largest retailer of leather furniture said sales orders rose 35 percent in the fiscal first quarter as the company opened new stores.

Northgate Information Solutions Plc (NIS LN), the U.K.’s biggest supplier of payroll systems, lost 1.5 pence, or 1.8 percent, to 80.25 pence, even as it said full-year financial performance will meet the company’s expectations.

Wolseley Plc (WOS LN) lost 22 pence, or 1.8 percent, to 1,184. The world’s biggest supplier of plumbing and heating equipment said it spent 61 million pounds on six acquisitions in the U.S. and Europe, adding builders’ merchants and distributors.

Source-  bloomberg