U.K. Stocks Post Longest Losing Streak Since 2003; Xstrata Falls

By Sarah Jones - Nov 23, 2011 3:55 PM GMT+0700

U.K. stocks (UKX) dropped for an eighth day, the longest stretch of losses since 2003, led by a selloff metal producers as a report showed Chinese manufacturing may contract this month and Australia passed a mining tax.

Xstrata Plc (XTA) and Vedanta Resources Plc (VED) both lost more than 1.5 percent as base metals declined in London.

The benchmark FTSE 100 Index lost 11.94, or 0.2 percent, to 5,194.88 at 8:54 a.m. in London, extending the gauge (F3MNG)’s loss since Nov. 11 to 6.3 percent. The FTSE All-Share Index dropped 0.2 percent, while Ireland’s ISEQ Index was little changed.

A gauge of mining companies declined 1.1 percent after a preliminary purchasing managers’ index showed manufacturing in China may contract this month by the most since March 2009 as home sales slide, adding to evidence the world’s second-biggest economy is slowing.

The reading of 48 reported by HSBC Holdings Plc and Markit Economics for November compares with a final number of 51 for October. A number below 50 indicates contraction.

Separately, Australia’s lower house of parliament passed legislation for a 30 percent tax on coal and iron-ore profits as independent lawmakers and the Greens Party backed Prime Minister Julia Gillard’s plan.

The Minerals Resource Rent Tax Bill will probably be passed and become law early next year after a vote in the upper-house Senate, where the Greens hold the balance of power. BHP Billiton Ltd. (BHP), Rio Tinto Group and other iron-ore and coal producers face paying about A$11 billion ($10.8 billion) in extra charges in the first three years of the tax.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net