In These New Times

U.K.’s FTSE 100 Index Falls for Fourth Day on Economic Concern

By Alexis Xydias

Oct. 2 (Bloomberg) — U.K. stocks fell for a fourth day, the longest losing streak since April, after a report on U.S. jobs added to other disappointing economic data this week.

Mining companies and banks, among the best performers in a seven-month equity-market rally, led losses. Eurasian Natural Resources Corp., a producer of raw materials in Kazakhstan, and Kazakhmys Plc fell with metal prices. Royal Bank of Scotland Plc and Lloyds Banking Group Plc slumped more than 4 percent.

The benchmark FTSE 100 Index fell 59.11, or 1.2 percent, to 4,988.7, taking the loss this week to 1.8 percent. The FTSE All- Share Index slipped 1.3 percent today, while Ireland’s ISEQ Index dropped 2.2 percent.

The FTSE 100 has surged 42 percent since this year’s low on March 3 amid speculation the worst of a global slowdown is past. Employers in the U.S. cut more jobs than forecast last month, a Labor Department report showed today, adding to this week’s worse-than-expected releases on U.K. manufacturing and consumer confidence in the U.S., the world’s largest economy.

“We’ve had some disappointments and it’s understandable that it may bring some fear to the market,” said Joost van Leenders, an Amsterdam-based strategist at Fortis Investments. “The near term still looks positive, so we tend to regard this more as a pause than a big correction. If you get some more disappointment in the data, people will get nervous.”

ENRC declined 3.2 percent to 806 pence. Kazakhmys, Kazakhstan’s biggest copper producer, tumbled 4.9 percent to 986.5 pence. ENRC gained 164 percent between March 3 and yesterday, while Kazakhmys surged 340 percent.

Copper Declines

Copper for delivery in three months slid as much as 2.9 percent to $5,810 a metric ton in London, extending yesterday’s 2.8 percent slump. Nickel, lead, zinc and aluminum also fell.

Xstrata Plc, the world’s largest exporter of coal used by power stations, declined 2.1 percent to 853.5 pence as the miner was told by the U.K. Takeover Panel to make a formal offer for Anglo American Plc by Oct. 20 or walk away from its intention to buy it. Anglo American, which has rejected Xstrata’s proposal to merge, dropped 0.5 percent to 1,876.5 pence.

RBS dropped 7.7 percent to 46.64 pence and Lloyds declined 4.5 percent to 94.75 pence as talks continued between the two banks and the government about implementation of the 576 billion-pound ($913 billion) Asset Protection Scheme.

RBS and Lloyds jumped 134 percent and 193 percent respectively between March 3 and yesterday.

“There is the question of fundraising for Lloyds and RBS in order to partially withdraw from the APS,” said Simon Willis at NCB Securities Ltd. in London who has a “sell” rating on Lloyds and “reduce” on RBS. “After a fantastic third quarter the market is nervous coming to the fourth quarter.”

Legal & General

Legal & General Group Plc, the U.K.’s second-largest insurer by assets, fell 3.1 percent to 85.2 pence, the first decline in six days. Goldman Sachs Group Inc. yesterday afternoon removed the stock from its “conviction buy” list after a 17 percent jump in the previous three days. The stock remains a “buy” at Goldman Sachs.

SABMiller Plc added 2.4 percent to 1,516 pence. The brewer is among companies that have held talks with Fomento Economico Mexicano SAB, Latin America’s largest beverage company, about a possible combination of operations, the Wall Street Journal reported yesterday, citing unidentified people familiar with the situation.

To contact the reporters on this story: Alexis Xydias in London at axydias@bloomberg.net.

Last Updated: October 2, 2009 12:19 EDT