U.K. stocks declined as the U.S. and European Union considered extending sanctions against Russia for causing unrest in eastern Ukraine, and Rio Tinto Group led commodity producers lower.
Rio Tinto slid 3.1 percent after reporting quarterly iron-ore output that trailed projections. SABMiller Plc retreated 2.3 percent after posting fourth-quarter net producer revenue that missed analysts’ estimates. Aggreko Plc gained 1.2 percent after saying underlying group revenue increased 5 percent.
The FTSE 100 Index fell 42.15 points, or 0.6 percent, to 6,541.61 at the close in London. The benchmark gauge dropped 2 percent last week amid a selloff in stocks considered too expensive by some investors. The broader FTSE All-Share Index lost 0.7 percent today, while Ireland’s ISEQ Index retreated 1 percent.
“People are much more skittish and one of the main contributors has been Ukraine,” Toby Morris, a London-based sales trader at CMC Markets Plc, said by telephone. “Regardless of the actual implications of a potential war or small-scale conflicts, the very fact that this has been going on for two months is going to have an economic impact. Ukraine is not a huge economy but anything that’ll distort Russia’s relationship with the Europe is going to impact everyone.”
Ukraine started its military offensive in its eastern parts, accusing Russia of sending troops into its territory and deceiving its people through propaganda.
U.S. President Barack Obama and Russian President Vladimir Putin failed to reach a breakthrough in an overnight phone call over the escalating crisis in eastern Ukraine. The two countries will proceed with four-party talks in Geneva with the EU and Ukrainian officials in two days.
EU ministers yesterday decided to put more names on a list of people to be sanctioned, adding to the 51 Russians and Ukrainians blacklisted following Russia’s annexation of Crimea. Obama hasn’t ruled out unilateral sanctions that would more directly target the Russian economy.
Rio Tinto fell 3.1 percent to 3,302.5 pence. The world’s second-largest mining company said first-quarter iron ore production rose to 52.3 million metric tons. That missed the 54.7 million-ton median estimate in a Bloomberg survey.
The FTSE 350 Mining Index slid 2.3 percent. Polymetal International Plc lost 4.1 percent to 615 pence, while Fresnillo Plc fell 3.3 percent to 901.5 pence.
SABMiller declined 2.3 percent to 3,052.5 pence. The world’s second-biggest brewer reported revenue that rose 3 percent in the year through March and 2 percent in the fourth quarter, missing the median estimate of analysts for a 4 percent increase in both periods.
G4S Plc dropped 3 percent to 240.6 pence. Deutsche Bank AG lowered its recommendation for the security-services company to sell from hold, citing its valuation and a limited scope for growth and cost cuts. G4S trades at 16.3 times its projected earnings, compared with the five-year average of 12.1 times.
Aggreko gained 1.2 percent to 1,528 pence. The world’s largest provider of mobile power generators said revenue in the Americas rose 11 percent in the first quarter and increased 15 percent in Europe, Middle East and Africa.
Royal Mail Plc added 3.7 percent to 510 pence, for the biggest gain in the FTSE 100. United Utilities Group Plc increased 2.1 percent to 769.5 pence. SSE Plc rose 1.8 percent to 1,495 pence, while National Grid Plc advanced 1.3 percent to 824 pence.
“We saw the beverages sector yesterday in demand on yield considerations and today again we now see it the utilities,” Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England, said in an interview. Utility stocks in the Stoxx Europe 600 Index yield 5.7 percent, compared with 3.5 percent for the broader gauge.