U.K. Stocks Fall, Led by Miners, as Fed Signals Paring

U.K. stocks dropped for a second day after Federal Reserve Chairman Ben S. Bernanke said the central bank may consider ending bond purchases next year and as data showed a contraction in Chinese manufacturing accelerated.

Randgold Resources Ltd. (RRS) and Rio Tinto Group led losses among mining companies, each falling more than 3 percent. ARM Holdings Plc (ARM) dropped 4 percent, after sliding yesterday on U.S.- based Nvidia Corp.’s plans to license technology to other processor makers. Ashtead Group Plc rose 2.8 percent after posting earnings that beat estimates and raising its dividend.

The FTSE 100 Index (UKX) fell 103.03 points, or 1.6 percent, to 6,245.79 at 8:52 a.m. in London. The gauge has lost 8.7 percent since Bernanke first said May 22 the Fed could scale back stimulus if the economy improves. The broader FTSE All-Share Index slid 1.5 percent today and Ireland’s ISEQ Index declined 0.5 percent.

Stocks tracked a selloff in U.S. equities after Bernanke said in Washington yesterday that the Fed will probably taper its stimulus measures later in 2013 and halt bond purchases around mid-2014 as long as the economy performs in line with Fed projections. He was speaking after a two-day meeting of the Federal Open Market Committee.

The central bank said it will keep buying bonds at a pace of $85 billion a month, and repeated that it’s prepared to increase or reduce the pace of purchases depending on the outlook for the job market and inflation.

A gauge of London-listed mining companies dropped 3.4 percent as China’s manufacturing shrank in June, for a second successive month. A preliminary reading of 48.3 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics compared with the 49.1 median estimate in a Bloomberg News survey of 15 economists.The final reading of 49.2 in May was the first below 50 since October, indicating contraction.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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

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