Most U.K. Stocks Fall, Led by Mining Companies; BP, Shell Gain

By Adam Haigh

Dec. 22 (Bloomberg) -- Most U.K. stocks declined, led by mining companies, on concern the deepening global recession will curb earnings.

Rio Tinto Group slid 1.5 percent as UBS AG cut its earnings estimate and the world’s third-largest mining company halted production at an iron plant. Anglo American Plc slid more than 2 percent

BP Plc and Royal Dutch Shell Plc, Europe’s two-largest oil companies, gained more than 1 percent as crude rose above $43 a barrel

The benchmark FTSE 100 Index rose 8.19, or 0.2 percent, to 4,295.12 at 1:18 p.m. in London as 61 stocks retreated and 40 gained. The FTSE All-Share Index was little changed. Ireland’s ISEQ Index added 0.9 percent as the government said it will pump 5.5 billion euros ($7.7 billion) into its three largest banks.

“We are going to enter 2009 with global economic activity at an incredibly low ebb,” said Charles Stanley & Co. U.K. equities analyst Jeremy Batstone-Carr.

The FTSE 100 has slumped 33 percent this year and is headed for it’s worst annual drop on record after more than $1 trillion in global losses and writedowns at financial firms froze credit markets and eroded profits.

Rio Tinto lost 1.5 percent to 1,407 pence. UBS cut its profit forecast for the mining company after analysts lowered their coking coal price estimates.

Anglo American, the world’s fourth largest diversified mining company, declined 1.2 percent 1,432 pence.

BP Plc, Europe’s second-largest oil company, added 2 percent to 515 pence. Shell, the biggest, gained 1.2 percent to 1,794 pence. The two companies account for around 20 percent of the FTSE 100 Index by market weighting.

Crude Gains

Crude oil rose above $43 a barrel after OPEC restated its commitment to enact record production cuts announced last week in the face of a global economic slowdown.

Ireland’s ISEQ gained as the government said it will pump 5.5 billion euros into its three largest banks. Allied Irish Banks Plc added 21 percent to 2 euros as Ireland’s biggest lender by market value agreed to capital measures with the Irish government.

Bank of Ireland Plc soared 43 percent to 97 cents. Ireland’s largest bank by assets will receive 2 billion euros from the government, the finance ministry said.

Anglo Irish Bank Corp. fell 22 percent to 27 cents after the government said it would take control of the company by pumping in 1.5 billion euros.

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