U.K. stocks declined, snapping a two-day rally, led by a selloff in commodity companies as base metals fell and Tullow Oil Plc (TLW) delayed full production of its oil field in Ghana. Rio Tinto Group, Kazakhmys Plc (KAZ) and Xstrata Plc (XTA) all fell as copper dropped. Tullow tumbled 7.8 percent, its biggest slide in two months. Man Group Plc (EMG) paced advancing shares as the hedge fund manager announced cost cuts. The FTSE 100 Index lost 0.2 percent to 5,680.67 at 9:38 a.m. in London after rallying 1 percent over the previous two days. The FTSE All-Share Index also slid 0.2 percent today, while Ireland’s ISEQ Index slipped 0.2 percent. U.K. shares extended losses after Alessandro Settepani, a senior director at Fitch Ratings, said the company may downgrade Italy by two levels before the end of January, news agency Ansa reported. Settepani spoke on the sidelines of a conference in Milan today. Rio Tinto dropped 1.3 percent to 3,644.5 pence, Kazakhmys slid 0.7 percent to 1,080 pence and Xstrata lost 1 percent to 1,053 pence as copper declined on the London Metal Exchange. Base metals fell as the World Bank cut its forecast for global growth by the most in three years in its Global Economic Prospects report. The institution said the recession in the euro area threatens to exacerbate a slowdown in emerging markets. Tullow Oil Plunges Tullow tumbled 7.8 percent to 1,341 pence after the London- based explorer further delayed full production from its Jubilee oil field in the West African country for at least a year. Along with its partners Anadarko Petroleum Corp. and Kosmos Energy Ltd., the company will invest about $400 million to fix mechanical problems. Jubilee will reach output of 120,000 barrels of oil a day in 2013, according to Chief Operating Officer Paul McDade. Man Group rallied 4.6 percent to 112 pence, rebounding from yesterday’s 2.9 percent retreat. The world’s largest publicly traded hedge fund announced plans to reduce costs by $75 million after assets under management fell 9.5 percent in the fourth quarter. Funds declined to $58.4 billion at the end of December from $64.5 billion three months earlier. That met the estimate of some analysts including Barclays Plc’s Daniel Garrod. 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

Source