U.K. stocks declined, following the second-biggest weekly increase this year for the benchmark index, as slower-than-forecast economic growth in China led to a selloff in the shares of mining companies.
Randgold Resources Ltd., Polymetal International Plc and Fresnillo Plc each slumped at least 8 percent as gold plunged the most in three decades and silver fell to a 2 1/2-year low. United Utilities Group Plc gained 2.5 percent after a report that the water company hired Goldman Sachs Group Inc. amid speculation of a takeover bid.
The FTSE 100 Index fell 40.79 points, or 0.6 percent, to 6,343.6 at the close in London. The gauge climbed 2.2 percent last week, its biggest advance since early January, as Chinese imports beat forecasts. The broader FTSE All-Share Index slid 0.7 percent and Ireland’s ISEQ Index dropped 0.5 percent today.
“Mining stocks have taken their cue from the weaker-than-expected first-quarter GDP figures from China,” Jeremy Batstone-Carr, head of research at Charles Stanley Group Plc in London, said in a telephone interview. “Miners are being driven down by the metal slamdown, with the U.K. underperforming relative to other benchmark indexes.”
In China, gross domestic product rose 7.7 percent in the first quarter, the National Bureau of Statistics said in Beijing. That compares with the 8 percent median forecast by analysts in a Bloomberg News survey and 7.9 percent in the fourth quarter. March industrial production increased less than estimated, while retail-sales growth matched forecasts.
Data showed manufacturing this month in the New York region expanded less than projected. The Federal Reserve Bank of New York’s general economic index dropped to 3.1 in April from 9.2 in March. Readings exceeding zero signal expansion in New York, northern New Jersey and southern Connecticut. The median projection of 47 economists surveyed by Bloomberg was 7.
Britain’s economy will grow less than previously forecast this year and further bond purchases by the Bank of England may do little to stimulate the recovery, according to the Ernst & Young Item Club.
Gross domestic product will rise 0.6 percent, compared with a January forecast of 0.9 percent, the London-based group said in a report. Growth will accelerate to 1.9 percent next year and 2.5 percent in 2015, in line with previous estimates.
Randgold, a gold miner in Africa, declined 8.3 percent to 4,545 pence. Polymetal plunged 13 percent to 746 pence, the biggest loss since it sold shares to the public in October 2011. Fresnillo, the biggest primary silver producer, tumbled 15 percent to 1,080 pence, the largest drop since October 2008.
Gold plummeted 7.3 percent at 4:35 p.m. in London, the most since 1983, after sliding into a bear market last week. Silver fell 9.9 percent to the lowest price since October 2010.
Rio Tinto Group, the world’s second-largest mining company, lost 3.5 percent to 2,973 pence. BHP Billiton Plc, the biggest, retreated 3.6 percent to 1,824.5 pence.
Ladbrokes Plc slumped 8 percent to 190.3 pence, the lowest price since November. The U.K. gambling operator said it expects full-year operating profit to come in at the bottom of the projected range.
HSBC Holdings Plc, Europe’s largest bank, lost 1 percent to 681.4 pence. HSBC’s Swiss private bank was an “open door” for money laundering and terrorist finance because managers failed to exercise controls, said Herve Falciani, a former software technician accused of stealing data, said.
HSBC, Europe’s largest bank by market value, has said it became aware in 2008 that Falciani had stolen details on 24,000 accounts from its private bank in Geneva. Falciani cooperated with French investigators who used the data to search for tax dodgers and shared the information with Italian, Spanish and British prosecutors.
United Utilities gained 2.5 percent to 739 pence. Britain’s largest publicly traded water company hired Goldman Sachs amid speculation of a possible 7 billion-pound ($10.7 billion) takeover bid, the Sunday Times reported, without saying where it got the information.
Betfair Group Plc surged 12 percent to 782 pence, the biggest jump since October 2010. CVC Capital Partners Ltd. said it had preliminary talks with Richard Koch, Antony Ball and partners about a possible offer for the company.
The volume of shares changing hands in FTSE 100-listed companies was 19 percent lower than the average of the past 30 days, data compiled by Bloomberg show.