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U.K. Stocks Retreat as Russia Authorizes Force in Ukraine

U.K. stocks declined the most in a month after Russia’s parliament gave President Vladimir Putin the authority to use military force in Ukraine.

Aberdeen Asset Management Plc and Ashmore Group Plc each slid more than 3.5 percent as shares in financial-services companies dropped. Randgold Resources Ltd. climbed 3.8 percent.

The FTSE 100 Index lost 127.77 points, or 1.9 percent, to 6,681.93 at 12:06 p.m. in London as Ukraine’s navy chief said that gunmen had surrounded military facilities in the region of Crimea. The broader FTSE All-Share Index also slid 1.9 percent, while Ireland’s ISEQ Index tumbled 2 percent today.

“There is increased uncertainty, given the situation in Crimea,” Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England, said by phone. “It looks like, at the pain of some diplomatic telling off, Putin may gain access to the ports in the first step, and take back Crimea in the second step. There’s some risk aversion because of the small chance of a horrific event, like if someone in the West decides to take on Putin militarily.”

Putin won approval from lawmakers on March 1 to deploy troops in Ukraine. Russian-speaking forces subsequently arrived outside the Ukrainian infantry base at Privolnoye on the Crimean peninsula. Gunmen seized control of government buildings and airports in Crimea, where the majority of people speak Russian, at the end of last week. Crimea’s parliament voted on Feb. 27 to hold a referendum on the territorial status of the region.

Fund Managers

Aberdeen Asset Management and Ashmore, which both invest in emerging markets, dropped 3.6 percent to 376.4 pence and 4.1 percent to 303.7 pence, respectively. A gauge of London-listed financial-services stocks slid 3.2 percent.

U.S. Secretary of State John Kerry discussed using sanctions against Russia and Poland’s president called for the European Union to impose its own penalties. The 28-member EU bought almost half of Russia’s exports in 2012, according to the International Monetary Fund.

British American Tobacco Plc fell 1.8 percent to 3,192 pence. Morgan Stanley estimated that the company generated 10 percent of its revenue from Russia in 2013.

ITE Group Plc (ITE) tumbled 13 percent to 244.6 pence. The London-listed organizer of exhibitions and conferences earned 63 percent of its sales from Russia last year, according to data compiled by Bloomberg.

Smiths News Plc slid 13 percent to 179.5 pence after saying that its Bertram Books division made less profit in the six months ended Feb. 28 than a year ago because of competition on price and a mix of low-margin product categories.

Randgold gained 3.8 percent to 4,926 pence as gold climbed 1.4 percent, the metal’s biggest rally in two weeks.

To contact the reporter on this story: Namitha Jagadeesh in London at

To contact the editors responsible for this story: Cecile Vannucci at Will Hadfield, Srinivasan Sivabalan

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