U.K. stocks declined, for the FTSE 100 (UKX) Index’s biggest two-day retreat in a month, as banks slumped amid renewed concern the euro area has yet to contain its sovereign-debt crisis.
Barclays Plc and Royal Bank of Scotland Group Plc (RBS) both slid more than 3 percent as Spanish bond yields surged to a euro-era record amid a report that more regions in Spain may ask for aid. Xstrata Plc (XTA) fell 2.7 percent as copper declined.
The FTSE 100 lost 97.09, or 1.7 percent, to 5,554.68 at 10:56 a.m. in London as all but four stocks fell. The broader FTSE All-Share Index also retreated 1.7 percent today, while Ireland’s ISEQ Index slid 1.8 percent.
“The FTSE 100 has opened sharply lower as the euro crisis intensified in Madrid,” said Joshua Raymond, chief market strategist at City Index in London, in an e-mail. “The moves in Spanish bond yields over the last 48 hours of trading have been a big concern in the markets and a key catalyst for a bearish turn in equities.”
The FTSE 100 dropped on July 20 from an 11-week high, pacing a selloff in European stocks, after Spain said its recession will extend into next year and the region of Valencia said it would tap an emergency-loan fund.
Spain’s 10-year bond yield climbed 25 basis points to 7.52 percent today, the most since the 17-nation currency began in 1999, after El Pais reported that six Spanish regions may ask for aid from the central government.
Spain’s Regions
Murcia will request a bailout from Spain’s liquidity fund, El Pais reported today, citing unidentified government officials in the region. The local government faces 433 million euros ($524 million) in debt redemptions in the second half, the newspaper said.
Yields on securities with similar maturities in Italy, France and Greece also climbed following a report in Der Spiegel that the International Monetary Fund will stop paying rescue aid to Greece. The magazine cited unidentified European Union officials.
Greece’s creditors meet this week amid doubts that the country will meet its bailout commitments. Germany’s Vice Chancellor, Philipp Roesler, said that “if Greece doesn’t fulfill those conditions, then there can be no more payments.”
The troika of international creditors -- the European Commission, the European Central Bank and the IMF -- will arrive in Athens tomorrow.
Barclays, RBS
Barclays (BARC) led a gauge of U.K. banks lower, falling 3.3 percent to 154 pence. RBS dropped 4 percent to 196.5 pence and HSBC Holdings Plc (HSBA), Europe’s largest lender, declined 2.7 percent to 518.6 pence.
Mining companies also retreated with commodity prices after Song Guoqing, a member of the monetary-policy committee of the People’s Bank of China, said the world’s second-largest economy may slow for a seventh quarter to 7.4 percent in the three months to September.
Xstrata fell 2.7 percent to 818.2 pence and Antofagasta Plc (ANTO) slid 3.6 percent to 1,026 pence. BHP Billiton Ltd. (BHP), the world’s largest mining company, lost 3.4 percent to 1,754.5 pence.
Eurasian Natural Resources Corp. declined 4.5 percent to 364.2 pence following a report in the Sunday Times that ENRC is close to an agreement to buy out Dan Gertler, the owner of a 49.5 percent stake in a copper mine in Democratic Republic of Congo. The newspaper did not say where it got the information.
African Barrick Gold Plc (ABG) slumped 5.9 percent to 355.2 pence after the largest producer of the metal in Tanzania reported a 57 percent drop in second-quarter profit to $29.9 million as gold output declined and the company’s costs rose. Attributable gold output fell 11 percent to 153,099 ounces.
Tullow Oil Plc (TLW), the London-based explorer with the most licenses in Africa, slid 2.8 percent to 1,390 pence after rival Marathon Oil Corp. paid $35 million to Africa Oil Corp. for interests in two Kenyan exploration projects.
Africa Oil said that the two companies have also “agreed to jointly pursue exploration activities on an additional exploration area in Ethiopia.”
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
