U.K., Irish Stocks Fall; Rio Tinto, BHP Billiton, Elan Retreat

By Adam Haigh

Aug. 1 (Bloomberg) -- U.K. stocks fell, extending the FTSE 100 Index's three-month slump, as lower metal prices dimmed the profit outlook for raw-material producers. Ireland's ISEQ Index tumbled the most in a decade as Elan Corp. plummeted 46 percent.

Rio Tinto Group and BHP Billiton Ltd., which account for more than 6 percent of the FTSE 100's value, led the slide as copper fell in London. British Energy Group Plc retreated the most since January after failing to agree on a takeover by Electricite de France SA, the world's largest owner of nuclear power stations.

``There is some profit-taking in the miners as people rebalance their portfolios,'' said David Fineberg, a trader at CMC Markets in London. `` The sentiment is definitely that there is more downside to come.''

The FTSE 100 fell 23.2, or 0.4 percent, to 5,388.7 at 12:20 a.m. in London, trimming this week's gain to 0.7 percent. The FTSE All-Share Index lost 0.3 percent and Ireland's ISEQ Index decreased 6.6 percent, the biggest decline since October 1997 and the steepest drop today among 88 indexes tracked by Bloomberg.

Stocks extended declines after General Motors Corp., the biggest U.S. carmaker, posted a second-quarter loss of $15.5 billion.

Rio Tinto, the world's third largest mining company, slipped 3.8 percent to 5,138 pence. BHP Billiton, the biggest, lost 4.3 percent to 1,620 pence, falling for the first time in six days. Copper retreated 1.4 percent to $7,940 per metric ton.

British Energy, Elan

British Energy tumbled 4 percent to 700 pence. The company wouldn't back yesterday's offer of 765 pence a share from the Paris-based company because some of its largest investors would reject the approach at that price, said two people with knowledge of the takeover, who declined to be identified because the negotiations are private.

Elan slumped 6.27 euros to 7.23 euros in Dublin. Biogen Idec Inc. and Elan reported two confirmed cases of a deadly brain infection in patients taking the multiple sclerosis drug Tysabri.

Kingfisher Plc added 7 percent to 126.7 pence. Europe's largest home-improvement retailer agreed to sell its Castorama Italy unit to Groupe Adeo SA for 560 million euros ($872 million) in cash.

Trinity Mirror Plc, the publisher of the Daily Mirror newspaper, rallied 16 percent to 100.25 pence as Morgan Stanley upgraded the shares to ``overweight'' from ``equal-weight,'' citing ``more clarity on the schedule of pension costs and management's commitment to further cost reduction measures.''

Separately, Merrill Lynch & Co. lifted its recommendation for Trinity Mirror to ``neutral'' from ``underperform,'' saying ``much of the bad news on advertising is now known'' in a report.

Tullett Prebon Plc, the second-biggest broker of transactions between banks, added 1.1 percent to 471 pence after saying it's in talks to merge with GFI Group Inc. to expand its derivatives-broking business in the U.S.

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