U.K. stocks declined for a third day, as a drop in oil and gas companies offset a rally in bank shares. BP Plc (BP/) contributed most to the decline in the benchmark index as oil prices fell. Smith & Nephew LLC lost 2 percent after Societe Generale SA asked investors to sell the stock. Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc gained at least 2.8 percent each after a report said U.K. regulators relaxed bank capital rules to stimulate lending. The FTSE 100 (UKX) Index dropped 21.11 points, or 0.4 percent, to 5,789.14 at 9:47 a.m. in London. The gauge has still climbed 10 percent from this year’s low on June 1 as the European Central Bank agreed on unlimited bond purchases and U.S. unemployment fell to the lowest rate in more than three years. The broader FTSE All-Share Index slipped 0.3 percent, while Ireland’s ISEQ Index lost 0.1 percent today. Five companies, including Tesco Plc (TSCO), WPP Plc (WPP) and Wolseley Plc (WOS), are trading without the right to dividend today. Alcoa, the largest U.S. aluminum producer, kicked off the U.S. earnings season yesterday by cutting its forecast for global consumption of the metal by 1 percentage point on slowing Chinese demand. Oil fell 0.3 percent, declining from a weekly high in New York on speculation that crude stockpiles climbed in the U.S., the world’s biggest user of the commodity. BP Plc slid 0.7 percent to 434.75 pence, while Royal Dutch Shell Plc (RDSA) lost 0.9 percent to 2,195 pence. BG Group Plc, the U.K.’s third-largest natural gas producer, retreated 0.5 percent to 1,300 pence. A gauge of oil and gas stocks in the FTSE 350 Index retreated 0.7 percent. Smith & Nephew Smith & Nephew, Europe’s largest maker of artificial hips and knees, slipped 2 percent to 653 pence after SocGen initiated coverage of the stock with a sell rating. The shares are trading without the right to dividend today. Separately, U.S. medical devices company Biomet Inc. said today it saw some “deceleration in growth� for its orthopaedic hip and knee devices. The U.K.’s Financial Services Authority told lenders they won’t be required to set aside additional capital against new loans under the Funding for Lending program, the Financial Times reported today, without saying where it got the information. The loans will be looked upon as free of risk for regulatory purposes, the FT said. Regulators also told banks they won’t be required to meet an end-2013 deadline to achieve a core capital ratio of 10 percent of their assets, the newspaper said. Lloyds advanced 3.7 percent to 38.4 pence, RBS gained 2.8 percent to 264.5 pence and Barclays Plc added 1.5 percent to 224.8 pence. Anglo American Plc (AAL) led miners higher, gaining 1.5 percent to 1,841.5 pence. Rio Tinto Group, the world’s third-largest mining company, advanced 0.4 percent to 3,042 pence, while Lonmin Plc (LMI) added 1.8 percent to 515 pence. 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

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