U.K. stocks fell for the first time in three days, led by a selloff in banks and mining companies, as analysts said new rules may cost lenders as much as 244 billion euros ($306 billion) and base metal prices fell.
Barclays Plc lost 3.7 percent as Credit Suisse Group AG said in a report bank earnings may be curbed 37 percent by regulatory changes. Xstrata Plc dropped 3.2 percent as copper, aluminum and zinc tumbled on the London Metal Exchange.
The benchmark FTSE 100 Index declined 95.01, or 1.8 percent, to 5,338.72 at 11:53 a.m. in London. The FTSE All-Share Index fell 1.7 percent and Ireland’s ISEQ Index dropped 2 percent as banks declined in Dublin.
“We have seen investors continue to move money out of the banks and miners and info the safe havens of the dollar and gold,” said London-based Joshua Raymond, a market strategist at City Index. “Investors are happy to close out some of their gains as the week draws to close.”
Gold rose to a record $1,249.40 in London and the dollar climbed as investors bought the precious metal as a haven amid turmoil in European debt markets.
The FTSE 100 has still gained 4.3 percent so far this week, recovering some of last week’s 7.8 percent sell-off, after the European Union unveiled a near $1 trillion financial aid package aimed at preventing the sovereign-debt crisis from spreading.
Barclays sank 3.7 percent to 316.8 pence, while Lloyds Banking Group Plc declined 2.7 percent to 58.9 pence. Royal Bank of Scotland Group Plc slid 2.1 percent to 48.15 pence.
“Given the increase in regulatory proposals in recent months we believe that it is helpful for investors ahead of next month’s G20 summit to track the impact,” London-based Credit Suisse analyst Jagdeep Kalsi wrote in a report today.
Xstrata, the world’s fourth-largest copper producer, dropped 5.9 percent to 1,031.5 pence. BHP Billiton Ltd., the biggest mining company, fell 2.5 percent to 1,955 pence. Rio Tinto Group, the third-largest, lost 3.6 percent to 3,277 pence.
Base metals fell in London, paring a weekly advance, on a stronger dollar and amid concern about the risk to economic growth from European sovereign debt. Three-month delivery copper slumped as much as 2.8 percent to $6,960 a metric ton on the LME. Nickel, lead, tin and zinc also retreated.
Wolseley Plc surged 6.8 percent to 1,717 pence, one of just seven stocks to climb in the FTSE 100. The largest supplier of heating and plumbing products said it sees full-year trading profit above 347 million pounds ($505 million), topping analysts’ forecasts.
Shares of Kewill Plc surged 23 percent to 123 pence after the British logistics company said it received an indicative offer of 130 pence a share.