Most U.K. Stocks Decline, Led by Lloyds TSB; Daily Mail Slumps

By Sarah Thompson

Sept. 25 (Bloomberg) -- Most U.K. stocks slid, led by banks and travel-related companies, as investors speculated the slowdown in the economy will crimp earnings growth.

Lloyds TSB Group Plc declined 3.1 percent after Deutsche Bank AG recommended selling the shares. Daily Mail and General Trust Plc lost 8.3 percent after saying the economic slowdown has hit advertising revenue.

ITV Plc jumped 4.7 percent after the U.K.'s biggest commercial broadcaster got backing from the country's media watchdog for plans to cut costs.

The benchmark FTSE 100 index decreased 6.89, or 0.1 percent, to 5,088.68 at 9:22 a.m. in London as 50 stocks declined and 46 gained. The FTSE All-Share Index lost 0.1 percent and Ireland's ISEQ Index retreated 0.2 percent.

Growing speculation that lawmakers will derail the White House's plan to rescue banks even as Federal Reserve Chairman Ben S. Bernanke warned of ``grave threats'' facing the American economy pushed stocks lower in Europe and the U.S. yesterday. President George W. Bush called for a bipartisan approach to the rescue plan and said the U.S. will face a ``long and painful'' recession unless a bailout is agreed.

Lloyds TSB fell 3.1 percent to 258.75 after Deutsche Bank analyst Jason Napier cut his recommendation to ``sell'' from ``hold.''

``We expect property prices to fall further, arrears to rise, bank losses on default to rise and consensus earnings expectations to fall further,'' Napier wrote in a research date today. ``We see the risk of higher-than-expected loan losses as the key factor facing the sector,'' he added.

Daily Mail Falls

Daily Mail slumped 8.3 percent to 306.75 pence. Economic conditions ``are having an impact on our newspaper and property business but the B2B divisions have continued to perform well,'' Chairman Viscount Rothermere said in the statement.

TUI Travel Plc and Thomas Cook Group Plc, Europe's two biggest tour operators, fell 2.9 percent and 7.2 percent, respectively, to 200 pence and 208 pence.

ITV rose 4.7 percent to 44.25 pence after the regular allowed it to cut costs by reducing some programming with a public-service remit such as regional news in Scotland.

Some public service programs are ``increasingly commercially unattractive,'' such as ``current affairs, nations and regions programming, challenging drama, scripted comedy, and drama and factual programming for children,'' Ofcom said in a statement today.

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

U.K. companies:

BP Plc (BP/ LN) slid 2 pence, or 0.4 percent, to 485. Europe's second-largest oil producer plans to start a unit at its Texas City, Texas, refinery after the plant was shut because of Hurricane Ike.

HBOS Plc (HBOS LN) added 2.4 pence, or 1.3 percent, to 182.9. The U.K.'s biggest mortgage lender, which is being bought by Lloyds TSB, issued 3 billion pounds ($5.5 billion) of bonds backed by U.K. mortgages, according to Standard & Poor's.

Highland Gold Mining Ltd. (HGM LN) increased 7 pence, or 12 percent, to 66 pence. The miner part-owned by Russian billionaire Roman Abramovich posted a first-half profit following a year- earlier loss.

London Stock Exchange Group Plc (LSE LN) added 4.5 pence, or 0.5 percent, to 887. The operator of the world's fourth-largest market said SIS x-clear will compete with LCH.Clearnet Group Ltd. as a second central counterparty for U.K. stocks.

Real Good Food Co. (RGD LN) plunged the most since at least 2003, down 2.5 pence, or 33 percent, to 5 pence. The U.K. maker of Whitworths sugar reported a first-half loss and said market conditions at its main division remain ``challenging.''

Songbird Estates Plc (SBDB LN) dropped 3.5 pence, or 3.5 percent, to 97.5. The landlord to the bankrupt Lehman Brothers at its Canary Wharf estate in east London reported a first-half loss after the value of its offices slumped.

To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net.