U.K. Stocks Decline, Led by Mining Companies on Metals Prices

By Adam Haigh

Dec. 7 (Bloomberg) -- U.K. stocks retreated the most in a week as lower metals prices weighed on raw-material producers.

Rio Tinto Group and Xstrata Plc led a retreat among mining shares as copper fell in London. Scottish and Southern Energy Plc lost the most in more than two months after saying returns allowed by the energy regulator will be “significantly” lower.

The benchmark FTSE 100 Index dropped 46.84, or 0.9 percent, to 5,275.52 as of 8:34 a.m. in London. The measure has rebounded 50 percent from its low on March 3 as governments committed about $12 trillion and central banks cut interest rates to record lows to end the global recession and revive credit markets. The FTSE All-Share Index slid 0.9 percent today and Ireland’s ISEQ Index retreated 1.3 percent.

“There is definitely a lack of appetite here,” said Manus Cranny, senior markets analyst at MF Global in London. “Metals prices are really under pressure.”

Rio Tinto, the world’s third largest mining company, slid 1 percent to 3,092.5 pence. Xstrata lost 1.7 percent to 1,048 pence. Copper, lead, nickel and tin prices declined on the London Metal Exchange.

Scottish and Southern Energy slid 2 percent to 1,102 pence. The utility company said returns allowed by Ofgem during the next five years will be “significantly’ lower than under the last price review.

Shanks Group Plc, the U.K. waste recycling company, surged 46 percent to 131.8 pence after saying it received a “highly preliminary and unsolicited approach” regarding a potential offer of 135 pence per share from a private equity group.

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