U.K. Stocks Fall, Led by Energy, Mining Stocks; EasyJet Drops

By Adam Haigh

July 24 (Bloomberg) -- U.K. stocks fell, led by mining and energy companies, as metal prices declined and oil traded near a seven-week low.

BHP Billiton Plc and BP Plc, which account for more than 10 percent of the benchmark FTSE 100 Index, led the slide. EasyJet Plc paced losses among airlines after Europe's second-biggest discount airline said fiscal-year pretax profit will fall as much as 46 percent because of higher fuel expenses.

The FTSE 100 dropped 42.8, or 0.8 percent, to 5,407.1 at 9:43 a.m. in London. The FTSE All-Share Index lost 0.8 percent and Ireland's ISEQ Index fell 2.1 percent.

``People are closing out their long oil and commodities trades to lock in profits,'' said Gregor Smith, a London-based fund manager at Daiwa Asset Management who helps manage $1 billion. ``They are getting incredibly nervous and just want to lock in gains as the oil price drops.''

BHP Billiton, the world's largest mining company, lost 1.8 percent to 1,587 pence. Rio Tinto Group, the third biggest, slid 2.2 percent to 4,990 pence. BP, Europe's second largest oil company, eased 1.1 percent to 516 pence.

Yesterday, oil dropped $3.98, or 3.1 percent, to settle at $124.44 a barrel, the lowest close since June 4. Copper, lead, tin and nickel fell in London.

EasyJet lost 23 pence, or 6.2 percent, to 347. Pretax earnings for the year through Sept. 30 will be 110 million pounds ($220 million) to 120 million pounds, the Luton, England-based company said. Record oil prices will add 185 million pounds in additional costs during the year, the airline said.

British Airways Plc, Europe's third-largest airline, slid 2.5 percent to 256.75 pence.

The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.

Colt Telecom Group SA (COLT LN), the U.K. provider of networking and data services, rose 2.75 pence, or 2 percent, to 141.75 after saying second-quarter profit almost quadrupled on the resolution of a billing issue.

Kingfisher Plc (KGF LN), the U.K.'s largest home-improvement retailer, surged 13.4 pence, or 11 percent, to 130.1. Sales at its B&Q unit rose in the last 10 weeks as improved U.K. weather conditions encouraged Britons to buy garden furniture and barbecues.

London Stock Exchange Group Plc (LSE LN) added 71 pence, or 8.6 percent, to 895.5 pence. Morgan Stanley upgraded the shares to ``equal-weight'' from ``underweight.''

Rolls-Royce Group Plc (RR/ LN), the world's second-biggest maker of aircraft engines, gained 9 pence, or 2.4 percent, to 377.75. First-half profit earnings increased as it sold more propulsion systems and won maintenance contracts.

Net adjusted income gained 11 percent to 309 million ($617 million) from 278 million pounds a year earlier, beating analysts' estimates.

Yell Group Plc (YELL LN) climbed 9 pence, or 13 percent, to 80. The publisher of Britain's Yellow Pages phone directory reported a higher fiscal first-quarter profit helped by its expanding Internet business and higher sales.

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