Most U.K. Stocks Fall, Led by Royal Bank of Scotland, Ryanair

By Adam Haigh

July 28 (Bloomberg) -- Most U.K. shares declined after the Financial Mail said Royal Bank of Scotland Group Plc may abandon the sale of its U.K. insurance division and Ryanair Holdings Plc reported profit that missed analysts' estimates.

Royal Bank of Scotland retreated. British Airways Plc and EasyJet Plc dropped after Ryanair said profit fell 85 percent because of increased fuel expenses.

Losses on the benchmark FTSE 100 Index were limited by mining companies as BHP Billiton Ltd. and Rio Tinto Group, which account for more than 6 percent of the measure, followed metal prices higher.

The FTSE 100 declined 1.7, or less than 0.1 percent, to 5,350.9 at 9:19 a.m. in London as two stocks retreated for every one that rose. The index earlier fell as much as 0.6 percent. The FTSE All-Share Index dropped 0.1 percent and Ireland's ISEQ Index decreased 2.3 percent.

``We are very underweight banks,'' Alex Crooke, who manages $1 billion as a fund manager at Henderson Global Investors in London, said in a Bloomberg Television interview. ``I've never made money in airlines. I've learnt over the years not to touch them. They are going to have to cut their 2008 summer schedules. They will struggle to grow. It's too early'' to buy British Airways or EasyJet.

Royal Bank lost 2.2 percent to 210.25 pence. The U.K.'s second-biggest bank may abandon the sale because of waning interest from buyers, the Financial Mail said, without saying where it got the information.

Carolyn McAdam, head of group communications, declined to comment when contacted by telephone.

Ryanair Slumps

Ryanair, Europe's biggest discount airline, slumped the most since January 2004, down 17 percent to 2.66 euros in Dublin. The company said it may post its first full-year loss since going public in 1997.

British Airways Plc dropped 5.2 percent to 234 pence. Four current and former executives of Europe's third-largest airline will be charged with price fixing by the U.K.'s Office of Fair Trading, the Financial Times reported, without citing anyone.

BA spokeswoman Laura Goodes and Corinne Gladstone, a spokeswoman at the Office of Fair Trading, declined to comment when reached by Bloomberg News.

EasyJet, Europe's second-biggest discount airline, lost 9 percent to 304.75 pence.

Sage Group Plc, the U.K.'s largest software maker, eased 1.6 percent to 197.8 pence. JPMorgan Chase & Co. downgraded the shares to ``underweight'' from ``neutral.''

BHP Billiton, the world's largest mining company, added 3 percent to 1,600 pence, while Rio Tinto, the third biggest, gained 2 percent to 5,052 pence. Copper, tin and nickel prices rose in London.

Unilever, the world's second-biggest consumer-products company, added 1.6 percent to 1,486 after agreeing to sell its laundry business in North America to Vestar Capital Partners for $1.45 billion.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net