U.K. stocks dropped for a fourth day, the longest losing streak for the benchmark FTSE 100 Index since August, as oil surged to a 28-month high after Libyan leader Muammar Qaddafi vowed to fight a growing rebellion.
Mining companies BHP Billiton Ltd. and Antofagasta Plc led declines in the FTSE 100 as nine shares fell for each one that rose. Logica Plc dropped 5.4 percent as full-year profit at the Anglo-Dutch computer services provider missed analyst estimates.
The FTSE 100 retreated 73.23, or 1.2 percent, to 5,923.53 at the 4:30 p.m. close in London, the biggest drop this month. The four-day slide has pared this year’s advance to 0.4 percent amid speculation political instability in the Middle East will cause higher inflation, weakening the economic recovery and curbing earnings. The FTSE All-Share Index lost 1.2 percent today, while Ireland’s ISEQ Index slipped 0.3 percent.
“The rise in oil prices could tip the economy into a significant period of sub-par growth,” Gerard Lane, an equity strategist at Shore Capital Group Ltd. in Liverpool, England, wrote in a report today. “We find ourselves less convinced about the robustness of the U.S. economy, and as such suggest that the equity market may suffer weakness, as it did in the second quarter in 2010.”
Governments rushed to evacuate thousands of expatriates from Libya as army units defected and a former aide to Qaddafi warned that the revolt may topple the regime within days. The holder of Africa’s largest oil reserves is the latest nation to be rocked by protests ignited by last month’s ouster of Tunisia’s president and fanned by the Feb. 11 fall of Egyptian President Hosni Mubarak.
Bank of England policy maker Spencer Dale joined Andrew Sentance and Martin Weale in voting for an interest-rate increase this month as a split widened on the dangers of inflation at double their target, according to minutes of the Feb. 10 decision published today.
“Equity markets may be negatively affected as the likelihood of at least three quarter-point rate rises this year becomes more firmly priced-in,” said James Stewart, an economist at North Square Blue Oak in London. “It is also supportive of sterling, which feeds into equities as it makes life more difficult for export-oriented companies.”
The pound strengthened against the dollar and the euro after the release of the BOE’s minutes.
BHP Billiton, the world’s largest mining company, lost 3.1 percent to 2,337.5 pence and Antofagasta sank 5.1 percent to 1,313 pence. Copper fell to a four-week low on speculation that unrest in North Africa and the Middle East will derail recovering economies as oil prices jump.
Logica sank 5.4 percent to 137.5 pence, the biggest decline since July. Pretax profit more than quadrupled to 193 million pounds ($313 million) in 2010, missing the average analyst estimate in a Bloomberg survey of 240 million pounds.
Rexam Plc slid 5.8 percent to 348.4 pence even after the world’s biggest beverage-can maker reported full-year net income of 124 million pounds, compared with a net loss of 29 million pounds a year earlier. The stock had rallied 11 percent this year before today’s slump.
Cable & Wireless Communications Plc rallied 6.2 percent to 49.33 pence, the biggest gain since 2008, after agreeing to sell its operating business in Bermuda for $70 million and saying it will buy back up to $100 million of shares.