April 14 (Bloomberg) -- U.K. stocks dropped, led by raw- materials producers including BHP Billiton and Corus Group Plc. Falling commodity prices renewed concern that gains for the shares this year have outpaced the outlook for profit growth.

Raw-material stocks have been ``over-hyped,'' said Hilary Wakefield, a fund manager at EFG Asset Management Ltd. in London, which oversees $1.3 billion in assets. ``The market got overenthusiastic. There are opportunities to take profits.'' His firm recently sold shares of BHP and BP Plc.

The benchmark FTSE 100 Index lost 15.4, or 0.3 percent, to 4945.4. The FTSE All-Share Index slipped 0.4 percent to 2481.08. The declines were limited by gains in drugmakers AstraZeneca Plc and GlaxoSmithKline Plc.

BHP, the world's largest mining company, fell 21.5 pence, or 3.1 percent, to 674. Corus, the U.K.'s biggest steelmaker, slid 2.75 pence, or 5 percent, to 52.75. Antofagasta Plc, an operator of copper mines in Chile, lost 25 pence, or 2 percent, to 1,200.

Copper futures fell 2 percent in New York to their lowest in eight weeks on concern production may catch up with demand in China. Gold dropped from a three-week closing high in London as a stronger dollar made the precious metal more expensive to buy with other currencies.

BHP, which is based in London, advanced 14 percent in 2005 through yesterday, surpassing a 3 percent gain for the FTSE 100. Corus added 11 percent. The FTSE All-Share Mining Index is up 8.2 percent this year.

BP, Europe's biggest oil producer, lost 7 pence, or 1.3 percent, to 540, falling for a fifth day even as Brent crude oil prices rose. Oil futures added 0.8 percent to $50.90 a barrel in London, following a 5.1 percent decline in the previous two sessions. BP shares are still up 6.8 percent this year.

Drug Stocks

AstraZeneca added 28 pence, or 1.3 percent, to 2,241. GlaxoSmithKline gained 29 pence, or 2.4 percent, to 1,253. Britain's two biggest drugmakers climbed after Merck & Co., the U.S. pharmaceutical company that withdrew the Vioxx painkiller in September, yesterday reported first-quarter profit of 62 cents a share. The company had forecast 54 cents to 58 cents a share.

Woolworths Group Plc, the owner of about 800 U.K. stores, plunged 13.5 pence, or 25 percent, to 41.5 pence, a record decline. Apax Partners Worldwide LLP, Europe's largest buyout and venture-capital firm, abandoned plans to buy the London-based retailer for 822 million pounds ($1.56 billion).

Separately, Woolworths said sales at stores open at least a year fell 3 percent in the first 10 weeks of 2005 and that it will pay a first-quarter dividend of 1.26 pence a share. Matalan Plc, Britain's largest discount clothing retailer, declined 6.5 pence, or 2.8 percent, to 229.25.

Rentokil, Boots

Other stocks that have risen in recent sessions on speculation they may receive offers from private-equity companies or other potential buyers, also declined.

Rentokil Initial Plc, the world's biggest pest-control business, fell 3 pence, or 1.8 percent, to 168.5. Credit Suisse First Boston said April 5 Rentokil's outlook may raise interest from potential acquirers.

Boots Group Plc slid 7.5 pence, or 1.2 percent, to 640. The Wall Street Journal reported April 8 that at least four private- equity firms may be interested in buying the U.K. drugstore company.

The following stocks made gains or losses in London. Stock symbols are in parentheses after the companies' names.

Barclays Plc (BARC LN), Britain's third-largest bank, added 6 pence, or 1.1 percent, to 570. The shares rose amid speculation that Bank of America Corp. may be considering a bid for the U.K. lender, said analysts including Mark Thomas.

``People think that they're in talks with somebody, either buying or selling, maybe something to do with Bank of America,'' said Thomas, an analyst at Keefe, Bruyette & Woods Ltd. in London, who rates Barclays shares ``market perform.''

Rhiannedd Brooke, a London-based spokeswoman for Bank of America, declined to comment, as did Jo Thethi, a spokeswoman at Barclays.

British Airways Plc (BAY LN) slid 7 pence, or 2.6 percent, to 264.5. Analysts at ABN Amro Holding NV cut their recommendation on shares of Europe's No. 3 airline to ``hold'' from ``add,'' citing concerns that revenue may be hurt by record fuel prices and slowing economic growth. The brokerage also reduced its ratings on Air France-KLM Group, Deutsche Lufthansa AG and Iberia Lineas Aereas de Espana SA.

GUS Plc (GUS LN) fell 12 pence, or 1.3 percent, to 901.5. The U.K.'s second-largest retailer by market value said quarterly sales at its Argos chain fell for the first time in six years as consumer demand waned.

George Wimpey Plc (WMPY LN) lost 10 pence, or 2.3 percent, to 426. Britain's biggest homebuilder by sales said visitor levels and reservations have ``remained stable'' since the start of the year. Numbers are lagging last year's levels, it said.

Highway Insurance Holdings Plc (HWY LN) fell 2 pence, or 5.1 percent, to 37.5. The Brentwood, England-based car insurer dropped after rival Chaucer Holdings Plc (CHU LN) said today it ended talks to buy it. Shares in Chaucer rose 1 pence, or 1.9 percent, to 53.5.

Prezzo Plc (PRZ LN) advanced 9.5 pence, or 4.3 percent, to 231. The U.K. operator of pizza and pasta restaurants said annual profit surged as sales more than doubled and a year-earlier loss linked to selling outlets didn't recur. The company also said it will pay its first dividend and split its shares.

Rolls-Royce Group Plc (RR/ LN) added 8.5 pence, or 3.4 percent, to 256.75, the biggest advance on the FTSE 100 and its highest jump since October. The world's No. 2 aircraft-engine maker said 2004 pretax profit increased 19 percent under new accounting standards being adopted this year. The company said profit this year will exceed analysts' estimates.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

Last Updated: April 14, 2005 12:11 EDT