Antofagasta Plc led a retreat in mining companies as commodity prices tumbled. Royal Bank of Scotland Group Plc (RBS) declined 3.4 percent as credit-default swaps for the bank climbed to a record. Aviva Plc (AV/) led a selloff among insurers.
The FTSE 100 lost 85.03, or 1.6 percent, to 5,129.62 at the 4:30 p.m. close in London as all but eight companies retreated. The benchmark fell last week amid concern policy makers won’t be able to stop Europe’s sovereign debt crisis from spreading. The FTSE All-Share Index and Ireland’s ISEQ Index lost 1.6 percent and 2.5 percent, respectively, today.
“What dictated direction was the only too familiar concern about European debt,” said London-based David Jones, chief market strategist at IG Index. “The belief that Germany is getting ready for Greece to default has gathered steam over the weekend and found momentum today.”
Officials in Chancellor Angela Merkel’s government in Germany are debating how to shore up German banks should Greece fail to meet the budget-cutting terms of its aid package, three coalition officials said on Sept. 9. BNP Paribas SA, Societe Generale SA and Credit Agricole SA may have their ratings cut by Moody’s this week because of their holdings of the Mediterranean nation’s debt, two people with knowledge of the matter said.
Vowing to Avoid
Greek Prime Minister George Papandreou, vowing to avoid a default and keep the country in the euro, approved new measures to help plug a budget gap as resistance builds at home and in Europe to extending more aid to the European Union’s most indebted nation.
Antofagasta dropped 3.1 percent to 1,249 pence, Vedanta Resources Plc lost 2.35 percent to 1,330 pence and Rio Tinto, the world’s second-biggest mining company, slipped 1.52 percent to 3,510 pence.
Commodities fell to the lowest level in more than two weeks amid concern slowing global economic growth may curb raw- materials demand.
Fresnillo Plc (FRES), the world’s largest primary silver producer, sank 7.49 percent to 1,989 pence as gold and silver fell for a second day. Randgold Resources Ltd. (RRS) declined 2.26 percent to 6,910 pence.
RBS dropped to 20.77 pence as credit-default swaps insuring the senior and subordinated bonds of Barclays Plc (BARC) and RBS rose to records, according to CMA. Barclays slid 1.63 percent to 141.65 pence and Lloyds Banking Group Plc (LLOY) lost 1.55 percent to 30.56 pence.
Banks also fell as Britain’s government said it will force lenders to insulate their consumer and investment banking units by 2019. A panel recommended that banks build fire breaks between their consumer and investment banks in a 360-page report by the Independent Commission on Banking today. The plans will cost as much 7 billion pounds ($11 billion), according to the report.
Aviva dropped 4.46 percent to 289.2 pence as insurance stocks posted the biggest losses among 19 industry groups in Europe today. Prudential Plc slid 1.47 percent to 568 pence and Old Mutual Plc slipped 1.16 percent to 110.4 pence.
Charter International Plc (CHTR) paced advancing shares, climbing 6.59 percent to 857 pence after Colfax Corp. announced plans to buy the company for 1.53 billion pounds.
Shareholders will receive 730 pence a share in cash and 0.1241 new Colfax shares for each Charter equivalent, giving a total price of 910 pence, Colfax said in a statement. The offer is 48 percent higher than Charter’s closing price on June 28, the day prior to Melrose’s preliminary proposal.
Melrose gained 3.29 percent to 289.2 pence.
Yell Group Plc (YELL) dropped 6.94 percent to 4.16 pence after the Financial Times reported that the company has asked HSBC Holdings Plc to create a committee to gather its banking syndicate and renegotiate its covenants. The newspaper did not say where it got the information.
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