Feb. 20 (Bloomberg) -- U.K. stocks declined, driving the FTSE 100 Index below 4,000 for the first time in three months, as Anglo American Plc’s lower-than-estimated profit and suspension of its dividend sparked a sell-off in mining companies.

Anglo American, which controls the world’s biggest platinum producer, dropped 17 percent after eliminating its payout for the first time since the outbreak of World War II and cutting 19,000 jobs. Liberty International Plc slumped 9.3 percent, leading real-estate stocks lower, as the company considers options for raising cash. BP Plc fell with crude oil.

The FTSE 100 Index sank 129.31, or 3.2 percent, to 3,889.06, the lowest level since Nov. 21. The benchmark retreated 7.2 percent this week as Bank of England Deputy Governor John Gieve said policy makers are trying to protect Britain from the threat of a decade-long slump similar to that experienced by Japan in the 1990s. The FTSE All-Share Index fell 3.2 percent today, while Ireland’s ISEQ Index declined for the ninth straight day, losing 4.3 percent.

“We have had a tsunami of bad news,” said David Buik, a London-based markets analyst at BGC Partners.

Anglo American slumped 17 percent to 1,027 pence. The company reported so-called underlying profit in 2008 fell to $4.36 a share, missing the $4.82 median of 22 analyst estimates compiled by Bloomberg.

Rights Offering

Rio Tinto Group, the world’s third-largest mining company, dropped 9.5 percent to 1,810 pence. The London-based Times reported Rio’s independent directors may be seeking the views of its 20 biggest British investors on the possibility of a multibillion-pound rights offer following strong opposition to its plan to raise $19.5 billion from Aluminum Corp. of China.

BHP Billiton Plc, the world’s largest mining company, declined 2.4 percent to 1,152 pence. Xstrata Plc, the world’s largest copper producer, retreated 11 percent to 643.5 pence.

Copper accelerated declines on the London Metal Exchange as stockpiles of the metal jumped to a five-year high, reviving speculation that demand is falling more quickly than supplies. Zinc and nickel also dropped.

Liberty International, the largest owner of shopping malls, dropped 9.3 percent to 317.5 pence. The company yesterday said it is considering alternative ways of raising capital. Land Securities Group Plc, the U.K.’s largest real estate investment trust which yesterday said it plans to raise cash by selling shares, lost 7.5 percent to 511 pence.

‘Ideally More’

“Liberty’s fall is in anticipation of a rights offer and some fears about who is going to underwrite it,” said Harm Meijer, an analyst at JPMorgan Chase & Co. “They need at least 400 million pounds to 500 million pounds and ideally more.”

BP, Europe’s second-largest oil company by market value, lost 4.3 percent to 462.5 pence. Royal Dutch Shell Plc, the biggest, slipped 3.1 percent to 1,648 pence.

Crude oil fell, paring its largest gain in seven weeks, as stock markets in Europe and Asia dropped on concern the recession is deepening.

The following stocks also gained or fell in the U.K. markets. Stock symbols are in parentheses.

British Airways Plc (BAY LN), Europe’s third-largest airline, lost 5 pence, or 3.8 percent, to 127.4 after rival Qantas Airways Ltd. had its credit rating cut by Moody’s Investors Service by one level to Baa2 as the global recession reduces demand for air travel.

Cattles Plc (CTT LN) plunged 9.75 pence, or 74 percent, to 3.5. The U.K. provider of subprime loans said pretax profit may be “substantially” below analysts’ estimates after it reviews bad-loan provisions. The company will delay releasing earnings until the inquiry into provisions is completed.

Centaur Media Plc (CAU LN) dropped 10 pence, or 30 percent, to 23.75 after the U.K. publisher of Money Marketing and The Lawyer magazines said full-year profit will probably be “significantly below the board’s expectations” because of a decline in recruitment advertising.

Prudential Plc (PRU LN) rallied 28.5 pence, or 11 percent, to 285, one of six stocks to rise on the FTSE 100. The U.K.’s second-largest insurer reported a 34 percent drop in fourth- quarter revenue to 3.7 billion pounds after lower sales in Asia.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Last Updated: February 20, 2009 13:26 EST