U.K. Stocks Fluctuate; Lloyds, Barclays Fall, Rio Tinto Gains

By Adria Cimino

Feb. 11 (Bloomberg) -- U.K. stocks fluctuated between gains and losses as investors weighed a European Union agreement to deal with Greece’s debt crisis.

Lloyds Banking Group Plc led financial shares lower. BT Group Plc sank 8.2 percent after saying the regulator has concerns about the valuation and recovery plan of its pension program. Rio Tinto Group, the world’s third-largest mining company, advanced after swinging to a profit in the second half.

The benchmark FTSE 100 Index added 7.59, or 0.2 percent, to 5,139.58 as of 3:07 p.m. in London after swinging between gains and losses at least 12 times. The index has lost 7.3 percent since this year’s high on Jan. 11 amid concern Greece, Spain and Portugal will struggle to curb their budget shortfalls. The FTSE All-Share Index rose 0.2 percent and Ireland’s ISEQ Index slid 0.4 percent.

The EU deal is “a first step, a first bit of good news,” said Arnaud Scarpaci, a fund manager at Agilis Gestion in Paris, which oversees about $150 million. “Now we have to see how it will be done and over what time frame. The stock market remains nervous.”

EU leaders meeting in Brussels today ordered Greece to get the bloc’s highest budget deficit under control and said they were prepared to take “determined” action to staunch the worst crisis in the euro currency’s 11-year history. The agreement stopped short of offering concrete measures to help Greece handle a debt load that exceeds its annual economic output.

Lloyds, Barclays

Lloyds, the U.K.’s biggest mortgage lender, lost 4.8 percent to 47.61 pence. Barclays Plc, Britain’s third-largest bank, slid 4 percent to 266.8 pence.

BT Group sank 8.2 percent to 120.6 pence. The U.K.’s largest fixed-line phone company said the pensions regulator has “substantial concerns with certain features of the agreement” between the company and the trustee of the BT pension plan on the triennial actuarial funding valuation and recovery program.

Rio Tinto advanced 1.4 percent to 3,182 pence. The company reinstated the payment of a dividend after swinging to a second- half profit as prices increased because of the global economic recovery.

The following shares also rose or fell in London. Stock symbols are in parentheses.

Catlin Group Ltd. (CGL LN) jumped 3.4 percent to 336 pence for the biggest gain since December. The owner of the largest insurance unit at Lloyd’s of London reported a 2009 profit on lower claims resulting from a benign U.S. hurricane season.

Diageo Plc (DGE LN) slipped 1.9 percent to 1,006 pence after three days of gains. The maker of Smirnoff vodka and Captain Morgan rum said first-half operating profit fell 6 percent to 1.54 billion pounds, missing analyst estimates.

Halma Plc (HLMA LN) soared 5.7 percent to 240.7 pence, for the biggest gain since December. The world’s second-biggest maker of smoke detectors expects its full-year net income to exceed market expectations as average weekly revenue rose 3 percent in the last four months compared with the first half of its financial year.

Rolls-Royce Plc (RR/ LN) rallied 6 percent to 518 pence, for the biggest gain since July. The world’s second-largest maker of aircraft engines reported annual profit ahead of analyst estimates and said it will raise the planned payout to investors after winning more defense contracts.

Smith & Nephew Plc (SN/ LN) increased 4.6 percent to 662 pence for its biggest gain since September. Europe’s largest maker of shoulder and knee implants said fourth-quarter operating profit rose 5.6 percent to $189 million.

Sports Direct International Plc (SPD LN) jumped 7.3 percent to 104.1 pence, the biggest gain since November. The largest U.K. sporting-goods retailer said group total sales in the 13 weeks to Jan. 24 were 370 million pounds ($577 million).

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.