U.K. stocks dropped for a second day, led by a selloff in mining and energy companies, as base metals declined amid signs of a global economic slowdown.
Kazakhmys Plc (KAZ) and Vedanta Resources Plc (VED) retreated more than 2 percent in London, sending a gauge of metal producers to its lowest level in three weeks. Tullow Oil Plc (TLW) and BG Group Plc (BG/) decreased as crude oil traded near its lowest price in more than eight months.
The FTSE 100 Index (UKX) fell 1 percent to 5,513.69 at the close in London, trimming the gauge’s third week of gains to 0.6 percent. The broader FTSE All-Share Index also lost 1 percent today, while Ireland’s ISEQ Index dropped 0.7 percent.
“Regional markets are stuck in a rut amid ongoing fears over slowing global growth,” said Ishaq Siddiqi, a market strategist at ETX Capital in London. “This week’s batch of rather gloomy macro releases have reignited these worries, pushing investors to book profits.”
The FTSE 100 yesterday dropped by the most in almost three weeks after manufacturing reports in Europe and China added to concern that global growth is weakening. The gauge has fallen 7.6 percent from its 2012 high on March 16.
A report today showed that business confidence in Germany, Europe’s largest economy, fell to the lowest level in more than two years in June as the worsening sovereign-debt crisis clouded the economic outlook. The Ifo Institute said its business- climate index, based on a survey of 7,000 executives, dropped to 105.3 from 106.9.
A gauge of U.K. mining companies retreated 2 percent as copper declined for a third day on the London Metal Exchange. Lead, tin and zinc also fell.
Kazakhmys lost 3 percent to 702 pence, Vedanta Resources retreated 2.9 percent to 903.5 pence and Xstrata Plc (XTA) decreased 2.7 percent to 816.5 pence.
India’s Business Standard reported that the government will reject Vedanta’s offer to buy stakes in Hindustan Zinc Ltd. and Bharat Aluminium Co. The newspaper cited a government official it didn’t identify.
Energy companies also retreated as crude oil traded near its lowest price since Oct. 4. Futures slumped 4 percent yesterday after the Federal Reserve Bank of Philadelphia’s economic index signaled the biggest contraction in manufacturing in almost a year.
Tullow Oil declined 3.4 percent to 1,431 pence, BG Group slid 2.4 percent to 1,217.5 pence and BP Plc (BP/), Europe’s second- biggest oil producer, fell 1.2 percent to 407.25 pence.
Michael Page International Plc (MPI) sank 4.3 percent to 365.8 pence after Credit Suisse downgraded the U.K. recruitment company’s shares to underperform, the equivalent of a sell rating, from neutral.
Analysts named Michael Page the “most vulnerable” of the recruitment companies. They warned of a “sharp decline” in earnings for the company in 2012.
Marks & Spencer Group Plc (MKS) fell 3.1 percent to 326.8 pence as Exane BNP Paribas initiated coverage of the retailer’s shares with an underperform recommendation.
In Ireland, Aer Lingus (AERL) Group Plc added 1.7 percent to 1.07 euros. Ryanair Holdings Plc (RYA)’s Chief Executive Officer, Michael O’Leary, and his advisers were due to meet with European Commission officials this morning, said two people familiar with the matter. The CEO wants to address any regulatory hurdles before the company files documents on the 1.30 euros-a-share, 694-million euro ($870 million) offer in the next few weeks, they said.
Ryanair shares gained 1.5 percent to 4.08 euros.
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