U.K. Stocks Drop, Led by Banks; RBS and Standard Chartered Fall

By Sarah Jones and Maud van Gaal

Oct. 21 (Bloomberg) -- U.K. stocks fell for the first time in three days, led by HSBC Holdings Plc, Europe's biggest bank by market value, Royal Bank of Scotland Group Plc and Standard Chartered Plc.

The FTSE 100 Index dropped 54.94, or 1.3 percent, to 4,227.73 at 1.54 p.m., having gained as much as 1.5 percent. The FTSE All-Share Index retreated 1 percent while Ireland's ISEQ Index rallied 6.7 percent.

HSBC declined 3.7 percent to 808.75 pence, snapping two days of gains. Royal Bank of Scotland, the U.K.'s fourth-largest bank, lost 8.6 percent to 77.2 pence after the shares jumped 23 percent yesterday. Standard Chartered, the U.K.'s third-biggest bank by market value, lost 5.5 percent to 1,068 pence.

``Trading conditions are sepulchral,'' said David Buik, a London-based market strategist at BCG Partners. ``Banks are out of favor today.''

The FTSE 100, which earlier today rose as much as 1.5 percent, is down 35 percent this year on concern the seizure in credit markets will trigger a global recession.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.