U.K. Stocks Drop After Manufacturing Data; Randgold Falls

U.K. (UKX) stocks declined, led by commodity shares, as a report showed Chinese manufacturing may contract this month and as purchasing managers’ indexes in Germany and France unexpectedly fell.

Randgold Resources Ltd. (RRS) dropped the most since Oct. 2008 after a military coup in Mali, where the company operates mines. Fresnillo Plc (FRES), the world’s largest primary silver producer, retreated 6.7 percent.

The FTSE 100 lost 46.3, or 0.8 percent, to 5,845.65 at the close in London. The gauge has still rallied 4.9 percent this year as U.S. economic data exceeded forecasts and the European Central Bank boosted lenders’ resources by about $1.3 trillion. The broader FTSE All-Share Index slid 0.8 percent and Ireland’s ISEQ Index slipped 1 percent.

“We’d have to look for some form of correction of between five and nine percent in equity markets,” said Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong. “People have been desperately squeezed into equity markets to meet performance.” He spoke in a Bloomberg Television interview today with John Dawson.

The FTSE 100 Volatility Index surged 10 percent to 17.1, the most since March 6. The gauge has surged 17 percent this week, poised for the largest increase in six weeks.

A preliminary measure of Chinese manufacturing fell to 48.1 this month, according to HSBC Holdings Plc and Markit Economics. That’s the lowest reading on the purchase managers’ index since November and compares with a final 49.6 in February. A result below 50 indicates a contraction.

Germany, France

Gauges of German and French manufacturing unexpectedly contracted. Germany (PMITMGE)’s manufacturing purchasing managers’ index dropped to 48.1 in March from 50.2. The CDAF purchasing & services managers’ index for France fell to 47.6 in March from 50 the previous month. Both had been forecast to increase, according to economist estimates surveyed by Bloomberg.

Randgold tumbled 13 percent to 5,765 pence. The Malian army suspended the country’s constitution and dissolved all state institutions. Mali vies with Tanzania to be Africa’s third- biggest gold producer.

Randgold Chief Executive Officer Mark Bristow said the events haven’t affected the company’s mines.

Fresnillo declined 6.7 percent, the most since Dec. 14, to 1,621 pence as silver prices fell. Rio Tinto Group lost 3 percent to 3,334 pence and BHP Billiton Ltd. (BHP) retreated 2.4 percent to 1,901 pence.

Independent News & Media Plc (INM) slid 2 percent to 24.5 euro cents in Dublin trading after Chief Executive Officer Gavin O’Reilly said Irish consumers are “still hurting.” The stocks had risen 8.1 percent yesterday.

Gulf Keystone Petroleum Ltd. (GKP) rallied 4.7 percent to 263.5 pence as the oil explorer active in the Kurdistan region of Iraq said some employees would get shares valued at about 26 million pounds ($41 million) in the event the company is sold.

Regus Plc (RGU) advanced 6.9 percent to 114.5 pence as Credit Suisse Group AG increased its estimates for earnings-per-share for 2012 and 2013.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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

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