U.K. Stocks Decline, Led by Mining Companies; Irish Banks Gain

By Adam Haigh

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

Rio Tinto Group slid 2.3 percent as UBS AG cut its earnings estimate and the world’s third-largest mining company halted production at an iron plant. BHP Billiton Ltd, the biggest, slid more than 2 percent.

The benchmark FTSE 100 Index fell 21.15, or 0.5 percent, to 4,265.78 at 8:45 a.m. in London. The FTSE All-Share Index slipped 0.5 percent. Ireland’s ISEQ Index added 1.3 percent as the government said it will pump 5.5 billion euros ($7.7 billion) into its three largest banks.

The FTSE 100 has slumped 34 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 2.3 percent to 1,396 pence. UBS cut its profit forecast for the mining company after analysts lowered their coking coal price estimates.

BHP Billiton slid 2.4 percent to 1,206 pence. Anglo American Plc, the world’s fourth largest diversified mining company, declined 1.9 percent 1,423 pence.

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 18 percent to 1.94 euros as Ireland’s biggest lender by market value agreed to capital measures with the Irish government.

Anglo Irish Bank Corp added 9 percent to 38 cents. Ireland’s third-biggest lender by assets will get 1.5 billion euros and the government will control shares with 75 percent of Anglo Irish’ voting rights, the finance ministry in Dublin said.

Bank of Ireland Plc soared 40 percent to 95 cents. Ireland’s largest bank by assets will receive 2 billion euros from the government, the finance ministry said.

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