U.K. Stocks Decline on Fed Minutes; Mining Shares Retreat

U.K. stocks declined for the first time in three days as commodity shares fell amid concern the U.S. Federal Reserve will scale back its bond-buying program.

BHP Billiton Ltd. (BHP) and Rio Tinto Group, the world’s largest mining companies, dropped at least 2.5 percent. HSBC Holdings Plc (HSBA) led banking shares lower as it slid 1.6 percent. BAE Systems Plc (BA/) jumped 4.7 percent after reporting better-than-estimated earnings and saying it will buy back 1 billion pounds ($1.5 billion) of shares.

The FTSE 100 lost 85.2 points, or 1.3 percent, to 6,310.17 at 9:05 a.m. in London. The equity benchmark has still rallied 6.9 percent so far this year as U.S. lawmakers agreed on a compromise budget and postponed a decision on spending cuts to March. The broader FTSE All-Share Index also retreated 1.3 percent today, while Ireland’s ISEQ Index slid 1.1 percent.

Fed officials yesterday expressed concern over whether record monetary easing will drive inflation higher or create asset-price bubbles, according to the minutes of the Federal Open Market Committee’s Jan. 29-30 meeting released yesterday.

Some participants “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” the minutes showed.

The volume of shares changing hands in FTSE 100-listed companies was 55 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

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

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