U.K. stocks fell from a two-month high, led by a selloff in mining and financial companies, after Chinese export growth slowed and Fitch Ratings downgraded Lloyds Banking Group Plc (LLOY) and Royal Bank of Scotland Group Plc. (RBS)
Antofagasta Plc (ANTO), the copper producer controlled by Chile’s Luksic family, and Kazakhmys Plc dropped more than 5 percent as metal prices declined in London. Lloyds and RBS also tumbled more than 5 percent. Ashmore Group Plc (ASHM) lost 4 percent as assets under management tumbled, while Man Group Plc (EMG) extended yesterday’s selloff.
The benchmark FTSE 100 Index (UKX) slid 38.42, or 0.7 percent, to 5,403.38 at the close in London, after rallying 11 percent over the previous six days. The FTSE All-Share Index also dropped 0.7 percent while Ireland’s ISEQ Index fell 1.2 percent in Dublin.
“After several days of risk-on trading for equity markets, today saw a session of risk aversion,” said Angus Campbell, head of sales at Capital Spreads. “This time it was concerns over global growth that knocked sentiment as data from China showed exports slowing.”
Stocks yesterday rallied to the highest level since Aug.3 amid growing optimism that euro-area policy makers will contain the region’s debt crisis. European Commissioner for Economic and Monetary Affairs Olli Rehn said the region is moving toward a consensus on resolving the “calamity.”
Antofagasta slid 6.3 percent to 1,078 pence as metal prices declined. Kazakhmys lost 5.7 percent to 878.5 pence and Vedanta Resources Plc (VED) dropped 5.1 percent to 1,199 pence.
Copper slid from a two-week high as data showed China’s export growth cooled to the weakest in seven months in September from a year earlier. China is the world’s biggest contributor to global economic growth.
Rio Tinto Group fell 2.3 percent to 3,283.5 pence even as the world’s second-largest mining company reported a 5 percent increase in third-quarter iron ore output.
Lloyds dropped 5.5 percent to 34.26 pence and RBS fell 6.4 percent to 24.16 pence after Fitch cut its credit ratings for the banks, saying government support for the industry is less likely. Lloyds’s and RBS’s long-term issue default ratings were lowered two steps to A from AA- while Fitch also reduced its so- called support rating floors for systemically important British banks to A from AA- and A+.
Barclays Plc (BARC), the U.K.’s second-largest lender by assets, declined 7.4 percent to 173.2 pence and Standard Chartered Plc slid 1.6 percent to 1,411.5 pence.
Ashmore, Man Sink
Ashmore dropped 4 percent to 318 pence after the U.K. fund manager focusing on emerging markets said assets under management fell 10.5 percent to $58.9 billion in the three months to Sept. 30.
Man Group declined 4 percent to 150 pence, the lowest level since 2001. The shares lost 6 percent yesterday after the head fund reported a 5.5 percent drop in the net asset value of its flagship fund.
Mitchells & Butlers Plc (MAB) tumbled 6.9 percent to 235.1 pence after Piedmont Inc. said it won’t proceed with an offer for the pub company. Piedmont, the investment vehicle owned by Bahamas- based billionaire investor Joe Lewis, holds a 23 percent stake in the owner of the All Bar One pub chain.
Rolls-Royce Group Plc (RR/) paced advancing shares, jumping 9.9 percent to 688 pence after agreeing to sell its 32.5 percent stake in its jet-engine venture to Pratt & Whitney for $1.5 billion.
Hargreaves Lansdown Plc surged 3.9 percent to 500 pence after the retail broker reported a 27 percent gain in revenue in the first quarter as net inflows increased.
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