U.K. stocks slid after the European Commission cut its growth forecast for Britain’s largest export partner and as concern over an impending U.S. fiscal crisis overshadowed the re-election of President Barack Obama.
Randgold Resources Ltd. (RRS) led a selloff by mining companies, tumbling more than 6 percent. Xstrata Plc (XTA) and Anglo American Plc (AAL) both lost at least 2 percent as copper dropped in London. Pennon (PNN) Group Plc slid 2.9 percent after Citigroup Inc. recommended investors sell the shares.
The benchmark FTSE 100 declined 93.27 points, or 1.6 percent, to 5,791.63 at the close in London as all but eight companies dropped. The gauge yesterday climbed to its highest level since Oct. 19 as Americans went to the polls. The FTSE All-Share Index retreated 1.5 percent today, while Ireland’s ISEQ Index both lost 1.4 percent.
Stocks initially rallied as much as 0.6 percent after Obama defeated Republican Mitt Romney, winning at least 303 Electoral College votes. He needed 270 for the victory. With one state -- Florida -- yet to be decided, Romney had 206 electoral votes.
“We don’t think it matters a huge deal,” said Kevin Gardiner, head of investment strategy for EMEA at Barclays Plc’s wealth management unit, on Bloomberg Television in London. “The key thing for us and our clients is very much what happens to that fiscal cliff as we go into 2013. We haven’t seen that risk dispelled significantly just yet.”
The president now faces a partisan divide in Congress as Republicans retained their House majority, while Democrats kept control of the Senate. The government will have to impose automatic spending cuts and tax increases at the beginning of next year unless Obama reaches a compromise with his opponents.
The European Commission said the combined economy of the 17 nations that use the single currency will expand 0.1 percent in 2013, slower than the 0.25 percent median forecast of 55 economists surveyed by Bloomberg.
The volume of shares changing hands in companies on the FTSE 100 (UKX) was 17 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
Randgold dropped 6.4 percent to 6,950 pence, the biggest decline on the FTSE 100, after the gold producer said that output will be at the bottom of its forecast range of 825,000 to 865,000 ounces. Chief Executive Officer Mark Bristow added that power disruptions at the Tongon mine in Ivory Coast will increase its costs. Gold slid for the first time in three days.
“We’re still going to have a very strong quarter, but we just can’t catch up,” Chief Executive Officer Mark Bristow said in an interview in London today. “Tongon has another couple of months to go before we really get on top of it.”
A gauge of mining companies sank 2.4 percent, its biggest decline since Sept. 26, as base metals retreated on the London Metal Exchange. Xstrata slid 2 percent to 975.8 pence and Anglo American dropped 3 percent to 1,874.5 pence. Glencore International Plc (GLEN) slipped 2 percent to 340.35 pence.
Pennon retreated 2.9 percent to 692.5 pence after Citigroup Inc. lowered its recommendation for the shares to sell from hold. The brokerage said it has turned more cautious on U.K. water utilities and cut its estimate for the shares to 650 pence, citing the company’s valuation.
Citigroup also downgraded Severn Trent Plc (SVT) to neutral from buy and reiterated its neutral recommendation for United Utilities Group Plc. (UU/) The shares fell 2.6 percent to 1,537 pence and 1.4 percent to 660 pence, respectively.
CRH Plc (CRH) dropped 3.9 percent to 1,157 pence in London, following an 8.4 percent rally over the past seven trading days. The stock also fell as Swiss cement maker, Holcim Ltd., reported third-quarter net income that fell short of analysts’ estimates.
Burberry Group Plc (BRBY) declined 4.2 percent to 1,199 pence, erasing an earlier gain of as much as 2.2 percent. The shares fell even as the U.K.’s largest luxury goods maker reported first-half profit that exceeded analysts’ projections. The stock surged 8.8 percent last week.
“We remain long-term fans, but the backdrop is tough,” said Bethany Hocking, an analyst at Investec Ltd. in London, who downgraded the stock to hold from buy. “Christmas is crucial, and we see few near-term catalysts.”
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