U.K. Stocks Fall, Led by Rio Tinto, Xstrata; Barclays Retreats

By Alexis Xydias

Jan. 13 (Bloomberg) -- U.K. stocks fell for a fifth day, led by mining companies after metal prices declined as a global economic slowdown curbs demand. Rio Tinto Group and Xstrata Plc retreated more than 5 percent.

Barclays Plc, Britain’s fourth-biggest bank, and Lloyds TSB Group Plc retreated at least 6 percent following reports that signaled a recession at home is deepening.

The benchmark FTSE 100 Index fell 76.43, or 1.7 percent to 4,349.76 as of 12:31 p.m. in London. The broader All-Share Index lost 1.9 percent. Ireland’s ISEQ Overall Index slipped 0.1 percent.

The FTSE 100 yesterday lost its 2009 gains as concern the economic recession will eat into earnings gained pace. The British economy slumped the most in at least two decades during the fourth quarter and home sales dropped to the lowest since the measure began in 1978, reports by lobby groups showed today.

“Last year we were thinking whether we were going into a recession, this year we know there is no real escape,” said Mark Bon, a London-based fund manager who helps oversee about $750 million at Canada Life Ltd. “It’s going to be a difficult year again.”

Rio Tinto slumped 5.9 percent to 1,512 pence. The world’s third-largest mining company delayed work on a $371 million program to automate iron ore trains in Western Australia and suspended a copper mine expansion because of the global recession.

Xstrata declined 5.9 percent to 765 pence. Europe’s largest zinc producer will shutter its Handlebar Hill zinc and lead mine in Australia from Feb. 12 as the global economy slows down.

Copper retreated for a second session in London, driven by increased stockpiles and falling demand from China, the world’s largest user of the metal. Aluminum, nickel and zinc also fell.

Home, Retail Sales

Barclays slumped 11 percent to 163.4 pence. Lloyds TSB, which is buying HBOS Plc, retreated 6.1 percent to 132.1 pence.

The British Chambers of Commerce’s survey of almost 6,000 companies showed the weakest results since it started in 1989, the London-based group said today. The average number of home sales per surveyor slipped and retail sales had the worst December in 14 years, reports by the Royal Institution of Chartered Surveyors and British Retail Consortium showed.

Elan Corp jumped 9 percent to 6.50 euros. Ireland’s largest drugmaker hired Citigroup Inc. to conduct a review of the company’s strategic alternatives, it said. These could include a minority investment, strategic alliance, merger or sale, Elan added.

The following stocks also rose or fell in U.K. and Irish markets. Stock symbols are in parentheses:

Aga Rangemaster Group Plc (AGA LN) dropped 4 pence, or 6.5 percent, to 57.75. The maker of country-style stoves said sales of cookers dropped 11 percent last year.

Game Group Plc (GMG LN) dropped 17.75 pence, or 12 percent, to 129.25 pence. The U.K.’s largest video-game retailer announced lower sales outside Britain and a more modest expansion plan amid a “challenging” 2009 outlook.

J.D. Wetherspoon Plc (JDW LN) lost 16 pence, or 5.1 percent, to 300. The owner of almost 700 U.K. pubs was cut to “sell” from “hold” at Deutsche Bank AG, which said the company has the “biggest refinancing hurdles” in its industry.

Premier Foods Plc (PFD LN) rose 1.5 pence, or 4.2 percent, to 37.5. The owner of the Hovis brand said full-year sales increased 9 percent, with second-half sales up 10 percent, in “an increasingly tough environment for the U.K. consumer.”

Taylor Wimpey Plc (TW/ LN) retreated 4 pence, or 16 percent, to 21 pence, its first decline in six sessions. The U.K.’s biggest homebuilder said it sold 35 percent fewer homes last year and will make further writedowns of its land amid the U.K.’s worst housing slump for 25 years.

Tesco Plc (TSCO LN) increased 4.8 pence, or 1.4 percent, to 355.1 pence. The U.K.’s largest retailer said revenue growth accelerated over the Christmas season after the company reduced prices to keep customers from switching to discount supermarkets.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net