U.K. Stocks Are Little Changed as Xstrata, Rio Tinto, GlaxoSmithKline Fall

U.K. stocks were little changed as investors waited for Greece’s politicians to agree on spending cuts to secure further financial aid and China said its industrial-output growth may slow.

Commodity companies led declining shares, with Xstrata Plc (XTA) falling 4.9 percent and Rio Tinto sliding 1.9 percent. GlaxoSmithKline Plc (GSK) dropped 1 percent after reporting sales that missed analysts’ estimates. Shire Plc (SHP) gained 2.4 percent as Goldman Sachs Group Inc. advised buying the shares. Aminex Plc (AEX) plunged 37 percent in Dublin trading, the most since October.

The FTSE 100 Index slipped less than 0.1 percent to 5,890.26 at the close in London, even as a report showed German industrial output unexpectedly fell in December. The benchmark measure has still rallied 19 percent from last year’s lowest level. The FTSE All-Share Index lost 0.1 percent today, while Ireland’s ISEQ Index declined 0.6 percent.

“It’s mostly the miners that are a big drag on the FTSE,” said Joshua Raymond, chief market strategist at City Index Ltd. in London. “There’s a look towards what’s happening in Greece. Also, the German industrial output missed quite badly, so that’s taking a little bit more wind out of the market.”

Greece’s prime minister, Lucas Papademos, plans to meet the leaders of the three political parties that support his government to win their backing to cut spending. German Chancellor Angela Merkel said yesterday “time is running out” for Greece.

German Economy

German industrial output unexpectedly dropped the most in three years in December, the country’s Economy Ministry said.

A gauge of mining shares sank 1.9 percent as copper declined for a second day on the London Metal Exchange after China said its production growth may slow.

“The global economy is slowing down, Europe’s sovereign- debt crisis is deepening and the downside risks to the world economy are rising with international demand still slack and global commodities and financial markets continuing to be volatile,” China’s Ministry of Industry and Information Technology said.

Xstrata fell 4.9 percent to 1,200 pence as Glencore International Plc agreed to buy it for about 26 billion pounds ($41 billion) in shares.

Glencore, Xstrata

Glencore, which already owns 34 percent of Xstrata, offered 2.8 new shares for each one held in the Zug, Switzerland-based coal exporter. Xstrata surged 16 percent last week as the two companies were said to be nearing an agreement to combine.

Standard Life Investments Ltd. and Schroders Plc, with a combined 3.5 percent stake in Xstrata, plan to oppose the deal.

Rio Tinto lost 1.9 percent to 3,869.5 pence, while BHP Billiton Ltd. (BHP) dropped 0.9 percent to 2,180 pence.

Glaxo, the U.K.’s largest drugmaker, fell 1 percent to 1,406 pence. The company reported fourth-quarter sales that missed analysts’ estimates and announced a smaller share-buyback plan than last year. Glaxo said it will buy back 1 billion to 2 billion pounds in stock this year and will use the proceeds from a sale of consumer brands to boost its dividend.

Burberry, Shire

Burberry Group Plc (BRBY), the U.K.’s largest luxury-goods maker, declined 1.8 percent to 1,420 pence. U.K. retailers had their second-worst January on record as the weaker economic outlook prompted consumers to curtail spending, the British Retail Consortium said.

Shire gained 2.4 percent to 2,179 pence. Goldman reiterated its “conviction buy” rating on the stock. Separately, U.K. newspapers reported renewed speculation about a possible bid for the drugmaker.

TalkTalk Telecom Group Plc (TALK), the U.K. broadband provider split off from Carphone Warehouse Group Plc, surged 11 percent to 131.5 pence, its highest price since at least March 2010, according to data compiled by Bloomberg. The company raised its earnings forecast after selling more expensive services.

In Dublin, Aminex, an Irish oil and gas explorer with operations in Africa, fell 37 percent to 4 euro cents after saying it is determining whether to drill at the Ntorya-1 exploration well in Tanzania.

“The targeted sandstone intervals were not encountered at the prognosed depths between 1,800 and 1,900 meters,” the company said today. “Further drilling found sandstone intervals along with traces of gas below 2,300 meters.”

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.