April 28 (Bloomberg) -- U.K. stocks fell, extending yesterday’s biggest decline in five months for the FTSE 100 Index, as a downgrade of Spain’s credit rating by Standard & Poor’s overshadowed a rally at Royal Dutch Shell Plc.
WPP Plc, the world’s largest advertising company, Barclays Plc and Rio Tinto Group led declining shares as S&P cut Spain’s credit rating to AA from AA+. Shell, which competes with BP Plc for the title of Europe’s biggest oil company, climbed to the highest in almost two years after posting a 57 percent increase in first-quarter profit.
The benchmark FTSE 100 Index lost 16.91 points, or 0.3 percent, to 5,586.61, extending yesterday’s 2.6 percent plunge. The FTSE All-Share Index dropped 0.5 percent today and Ireland’s ISEQ Index fell 2.5 percent.
The downgrade of Spain’s credit rating by S&P comes a day after Greece’s debt was lowered three steps to junk and Portugal’s by two levels. Europe’s worsening debt crisis is intensifying pressure on policy makers to widen a bailout package beyond Greece. As Greece waits for its euro-region partners to disperse funds, the European Union has announced no concrete plans to help other nations should aid be needed.
“One thing is clear: the markets will not wait for politicians,” said David Jones, the chief markets strategist at IG Index in London. “All eyes are now on Germany to see if Angela Merkel will cut a deal with other eurozone leaders to release funds and extend further aid.”
WPP fell 4.5 percent to 673 pence, while Barclays, the U.K.’s second biggest bank declined 1.5 percent to 352 pence. Rio Tinto Group lost 1.7 percent to 3,546 pence.
Carpetright Plc sank 3.2 percent to 860 pence after the U.K.’s biggest carpet retailer said sales were less than its forecast and it expects the year ahead to remain “challenging.”
F&C Asset Management Plc declined 3.1 percent to 63.25 pence. The London-based money manager agreed to buy Thames River Capital Group for as much as 53.6 million pounds ($81.8 million) to add hedge funds that generate larger fees. F&C sold shares at 59 pence each to fund the deal.
888 Holdings Plc sank 13 percent to 81.7 pence. The Internet gambling company said first-quarter operating income rose 21 percent to $69 million.
Shell gained 2.3 percent to 2,044 pence. The oil company reported net income in the first quarter rose to $5.48 billion from $3.49 billion a year earlier. Excluding gains or losses from holding inventories and one-time items, profit beat analyst estimates.
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