Sept. 29 (Bloomberg) -- U.K stocks declined for a second day as mining companies retreated amid concern that a slowdown in China’s economy could damp demand for commodities.
Copper producers Antofagasta Plc, Xstrata Plc and Rio Tinto Group fell as the base metal declined in London and Peru introduced a law creating a mining windfall tax. Tate & Lyle Plc rose 2.9 percent after forecasting profitable growth.
The benchmark FTSE 100 Index slipped 20.79, or 0.4 percent, to 5,196.84 at the 4:30 p.m. close in London. The gauge has tumbled 15 percent from its high this year on Feb. 8. The broader FTSE All-Share Index also slid 0.4 percent today, while Ireland’s ISEQ Index gained 0.4 percent.
“Concerns about a possible hard landing for the Chinese economy has weighed on mining stocks,” David Jones, chief marketing strategist at IG Index, wrote in an e-mail. “It is difficult to see a catalyst for further gains in the short term.”
Stocks in London broke ranks with other European markets that rose on better-than-forecast U.S. economic data. The U.S. economy grew at a 1.3 percent pace in the second quarter, faster than expected, and initial jobless benefit claims fell to the lowest in five months. The FTSE 100 swung between gains and losses six times during the day.
Most global investors predict Chinese growth will slow to less than half the pace sustained since the government began dismantling Mao Zedong’s communist economy three decades ago, a Bloomberg poll indicated. Fifty-nine percent of respondents said China’s gross domestic product, which rose 9.5 percent last quarter, will gain less than 5 percent annually by 2016.
Mining stocks retreated as copper declined for the ninth day in 10. Rio Tinto, the world’s second-largest mining company, declined 3 percent to 2,966.5 pence and Xstrata slipped 3.9 percent 845.1 pence. Antofagasta, a Chilean copper miner, fell 3.2 percent to 958.5 pence.
In Peru, the world’s third-largest copper and zinc producer and the second-biggest silver producer, President Ollanta Humala signed a law creating a minding windfall tax that will finance increased public spending.
British banks rose after Germany voted for expanding the scope of the euro region’s rescue fund. Royal Bank of Scotland Group Plc and Barclays Plc rose 1.7 percent each to 24.5 pence and 169.15 pence, respectively.
BP Plc, Europe’s second-biggest oil producer, fell 2 percent to 391.8 pence. Indian newspaper the Economic Times cited Chief Executive Officer Bob Dudley as saying BP will discuss selling some of its assets to Reliance Industries Ltd. as it seeks to deepen its partnership with India’s largest private sector company.
Man Group Plc, the world’s largest hedge fund, dropped 2.2 percent to 176 pence following a 25 percent plunge yesterday when the company said assets under management will drop by 8.5 percent.
Tate & Lyle, the maker of low-calorie sweetener Splenda, climbed 2.9 percent to 630.5 pence after maintaining its forecast for “another year of profitable growth.”
International Consolidated Airlines Group, the owner of British Airways and Iberia, rose 3.8 percent to 159.7 pence as the shares were rated “overweight” in new coverage at JPMorgan Chase & Co.
--Editors: Srinivasan Sivabalan, Andrew Rummer
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