U.K. Stocks Decline; Kazakhmys, Copper Producers Lead Retreat

By Sarah Jones

Nov. 28 (Bloomberg) -- U.K. stocks declined, led by copper producers, as the base metal retreated in London after inventories rose the most since 2004.

Kazakhmys Plc, Kazakhstan’s largest copper producer, Antofagasta Plc, and Xstrata Plc tumbled more than 5 percent as copper declined for a second day. BP Plc led energy companies lower as crude declined 2.5 percent.

The FTSE 100 Index dropped 8.08, or 0.2 percent, to 4,218.02 at 11:20 a.m. in London, having swung between gains and losses at least nine times. The FTSE All-Share Index fell 0.2 percent, while Ireland’s ISEQ Index lost 0.3 percent.

The FTSE 100 has still advanced 11 percent this week, pacing global equities higher, after China cut interest rates and the Federal Reserve’s pledge to buy $600 billion of debt sent mortgage rates down by the most in at least seven years.

“Global equity markets are coming to the end of what, by any standards, has been a spectacular week of recovery,” said David Buik, a London-based trader at BGC Partners in London. “Surely this is just a magnificent ‘dead-cat-bounce.’ Many doubt the world is anywhere near the depth of the recession.”

Kazakhmys sank 6.9 percent to 250.5 pence. Antofagasta Plc, owner of copper mines in Chile, dropped 6.1 percent to 434 pence. Xstrata Plc, the world’s fourth-largest copper producer, retreated 5.2 percent to 909 pence.

Copper dropped $56.50 to $3,639 a ton on the London Metal Exchange after inventories gained 2,925 tons to 291,650 tons, the most since Feb. 25, 2004. Copper averaged $2,726 in February 2004.

Rio Tinto Group Plc, the world’s third- largest mining company, fell 1.3 percent to 1,629 pence.

The company may have its credit rating downgraded because of its high level of debt and declining commodity prices, Standard & Poor’s Ratings Services said.

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

Rentokil Initial Plc (RTO LN) gained 2 pence, or 5.7 percent, to 37 after the world’s largest pest-control provider said Michael Murray will replace Andrew Macfarlane as chief financial officer from Jan. 5.

Murray, 41, joins from Global Solutions Limited, a support services group that was recently acquired by G4S Plc.

Royal Bank of Scotland Group Plc (RBS LN) dropped 2.3 pence, or 4.2 percent, to 52.7. Investors took 0.2 percent of shares offered in the U.K.’s biggest bank bailout leaving the government with almost 20 billion pounds ($31 billion) of stock and a majority stake.

Investors bought almost 56 million shares at 65.5 pence apiece. The U.K. government, which underwrote the offering, will buy the remaining ordinary shares for a total stake of 58 percent.

Tate & Lyle Plc (TATE LN) jumped 18.25 pence, or 4.9 percent, to 390.75 after the maker of the low-calorie sweetener Splenda appointed Peter Gershon as chairman. He will replace David Lees by the end of next year. Gershon joins the board on Feb. 1.

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