U.K. stocks declined, ending a four-day rally on the benchmark FTSE 100 Index (UKX), amid speculation European officials won’t be able to contain the region’s sovereign debt crisis.
Royal Bank of Scotland Group Plc (RBS) and Lloyds Banking Group Plc (LLOY) lost more than 5 percent as banks across Europe declined. Rio Tinto Group and Antofagasta Plc (ANTO) retreated more than 3 percent as metal prices dropped.
The FTSE 100 slid 108.85, or 2 percent, to 5,259.56 at the 4:30 p.m. close in London, paring some of last week’s 3 percent advance. The benchmark measure has lost 12 percent since the start of July amid mounting concern that Europe’s debt crisis is worsening and global economic growth is slowing. The FTSE All- Share Index fell 2 percent today, while Ireland’s ISEQ Index retreated 1.5 percent.
“Another week begins and the same old stories continue to vie for attention, with Greece struggling to convince the rest of Europe it can meet its obligations,” said Michael Hewson, a markets analyst at CMC Markets in London.
Greece’s ability to avoid default hangs in the balance this week as international monitors prepare to assess whether Prime Minister George Papandreou can meet the conditions of rescue loans. The Greek leader canceled a U.S. visit that was to begin yesterday, saying he needed to remain in the country for a “critical” seven days.
European Union and International Monetary Fund inspectors are holding a teleconference today with Greece’s Finance Minister, Evangelos Venizelos, to judge whether the government is eligible for an aid payment due in October.
RBS, the biggest government-owned lender, sank 5.7 percent to 22.88 pence. Lloyds declined 6.7 percent to 33.42 pence and Barclays Plc (BARC) retreated 6.6 percent to 152.7 pence.
U.K. Business Secretary Vince Cable is to look at ways to help shareholders curb excessive executive pay at underperforming companies, calling the current system “dysfunctional” and a failure of corporate governance. Options under consideration in a discussion paper published by Cable’s Department for Business, Innovation and Skills today include giving shareholders a binding vote on pay and putting employees on company remuneration committees.
Rio Tinto, the world’s second-biggest mining company, lost 3.3 percent to 3,505 pence. Antofagasta declined 8.2 percent to 1,194 pence, the largest drop since May. Copper, lead, nickel, tin and zinc fell on the London Metal Exchange.
Ocado Group Plc (OCDO) tumbled 11 percent to 118.4 pence as the biggest U.K. online-only grocer reported a slowdown in sales growth and said that profitability will be “slightly lower” than it had expected.
Meggitt Plc (MGGT) rose 3.6 percent to 331.5 pence, a fourth day of gains, as Goldman Sachs Group Inc. named the company on a list of potential European defense and aerospace takeover targets.
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