U.K. Stocks Drop; LSE, Anglo American, Legal & General Decline

By Adam Haigh

Nov. 26 (Bloomberg) -- U.K. stocks declined the most this month as Dubai’s proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.

London Stock Exchange Group Plc slid 4.6 percent. Borse Dubai Ltd. is the largest shareholder in the exchange operator. Anglo American Plc and Rio Tinto Group led mining companies lower as copper fell in London. Legal & General Group Plc, the U.K.’s second-biggest insurer by assets, slid 3 percent as Citigroup Inc. advised selling the shares.

The benchmark FTSE 100 Index lost 92.6, or 1.7 percent, to 5,272.2 as of 9:39 a.m. in London. The gauge has soared 50 percent since March 3 amid government stimulus programs and record low-interest rates. The FTSE All-Share Index slid 1.7 percent today and Ireland’s ISEQ Index dropped 1.7 percent. The volume of shares traded may be lower than normal today as U.S. exchanges are closed for the Thanksgiving holiday.

“This is not the end of the world for Dubai but it is a hammer blow,” said David Buik, a markets analyst at inter- dealer broker BGC Partners.

The cost of protecting government notes from Qatar to Saudi Arabia rose the most since June yesterday as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors.

London Stock Exchange slid 4.6 percent to 777 pence. Dubai has a stake of almost 21 percent in the company, according to Bloomberg data. Barclays Plc slid 4 percent to 303.8 pence. The Qatar Investment Authority owns more than 7 percent of the U.K.’s second-largest bank, according to Bloomberg data.

Anglo American Retreats

Anglo American dropped 1.3 percent to 2,653 pence. Rio Tinto, the third largest mining company, lost 1.6 percent to 3,095 pence. Copper declined as much as 0.5 percent in London and nickel, tin and zinc dropped.

Legal & General lost 3 percent to 82.25 pence. Citigroup cut its recommendation on the shares to “sell” from “hold,” citing “business model challenges.”

Mitchells & Butlers Plc rallied 3.9 percent to 266.9 pence. The U.K. owner of All Bar One and Toby Carvery pubs posted a full-year profit after a year-earlier loss as the company saw smaller declines in property values.

Severn Trent Plc, the U.K.’s second-largest water company, led gains in U.K. water utilities after industry regulator Ofwat said it would reduce household bills by less than previously estimated over the next five years. Severn Trent gained 3.7 percent to 1,043 pence, Pennon Group Plc advanced 2.2 percent to 497.7 pence and Northumbrian Water Group Plc climbed 5.5 percent to 270 pence.

Thomas Cook Group Plc added 1.3 percent to 211.2 pence. JPMorgan Cazenove Ltd. raised the shares to “outperform” from “in-line.”

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