U.K. stocks dropped from a seven- month high as investors considered whether the euro area’s second bailout for Greece will enable the Mediterranean nation’s economy to stage a recovery. Oil companies led declines, as Tullow Oil Plc (TLW) retreated 3.9 percent. William Morrison (MRW) Supermarkets Plc, the smallest of the U.K.’s four main food retailers, slid 1.4 percent after it was downgraded by Goldman Sachs Group Inc. Croda International Plc (CRDA) rose 4.2 percent after posting 2011 earnings that beat analysts’ estimates. The FTSE 100 (UKX) Index fell 120.46, or 0.3 percent, to 5,924,79 at 9:56 a.m. in London. The gauge has still rallied 20 percent from last year’s lowest level on Oct. 4. The benchmark measure jumped 0.7 percent yesterday to its highest level since July 8 as China cut its banks’ reserve requirements.The FTSE All-Share Index also dropped 0.3 percent today, while Ireland’s ISEQ Index decreased 0.3 percent. Euro-area finance ministers awarded Greece a 130 billion- euro ($172 billion) rescue, coaxed private creditors to provide more debt relief through a bond-swap offer and tapped into European Central Bank profits to avert the single currency’s first default. The deal includes a 53.5 percent writedown for investors in Greek debt, according to Luxembourg’s Prime Minister, Jean-Claude Juncker, who chaired the meeting of ministers in Brussels yesterday. U.K. stocks earlier declined as much as 0.4 percent as investors considered an International Monetary Fund analysis that suggested Greece’s debt will still swell to 160 percent of gross domestic product in a worst-case scenario. U.K. Budget Surplus Britain posted the biggest budget surplus in four years in January as Chancellor of the Exchequer George Osborne’s spending cuts continue to take effect. Revenue exceeded spending by 7.75 billion pounds ($12.3 billion), compared with a surplus of 5.2 billion pounds a year earlier, the Office for National Statistics said today in London. A gauge of oil and gas companies slid 0.6 percent. Tullow Oil retreated 3.9 percent to 1,538 pence after Anadarko Petroleum Corp. failed to give a figure for the potential reserves at a well it operates in Sierra Leone. Tullow owns a 20 percent stake in the Jupiter-1 well. BG Group Plc (BG/) slipped 1.2 percent to 1,491.5 pence. William Morrison lost 1.4 percent to 293.2 pence after Goldman Sachs added the shares to its “conviction sell� list. Croda International, the world’s second-largest maker of cosmetic ingredients, jumped 4.2 percent to 2,116 pence after posting pretax profit of 242.2 million pounds for 2011. That exceeded the average analyst estimate for 239 million pounds. An index of mining companies rose 0.7 percent as copper increased for a second day on the London Metal Exchange. Vedanta Resources Plc (VED) jumped 4.5 percent to 1,419 pence. Admiral Group Plc (ADM), the U.K. car insurer that owns the confused.com website, climbed 3.1 percent to 1,042 pence after its rating was raised to “outperform� from “neutral� at Credit Suisse Group AG. To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

Source