U.K. Stocks Drop, Paced by BHP, Rio; Anglo American Declines

U.K. stocks fell, paced by BHP Billiton and Rio Tinto Group, as copper slid for a third day.

Anglo American Plc declined the most in six weeks after the company said it's in no hurry to sell its stake in AngloGold Ashanti Ltd. Alliance & Leicester Plc led banking shares higher after the U.K.'s eighth-largest lender reported earnings that beat analysts' estimates. Imperial Tobacco Group Plc jumped on bid speculation.

The benchmark FTSE 100 Index lost 55.2, or 0.9 percent, to 6357.1. The FTSE All-Share Index decreased 0.8 percent to 3299.94. Ireland's ISEQ Index slid 0.1 percent to 9968.48.

Indexes erased gains after U.S. consumer prices rose more than forecast in January even as energy costs declined, suggesting inflation pressures persist.

BHP, the world's largest mining company, declined 1.7 percent to 1,070.5 pence. Rio Tinto, the third largest mining company, slipped 1 percent to 2,793 pence.

Copper prices in New York fell on speculation that lower energy costs will enable mining companies to further increase production. Copper futures for May delivery slid 0.85 cent, or 0.3 percent, to $2.5915 a pound after earlier dropping to $2.575, the lowest for the most-active contract since Feb. 13.

Nickel, aluminum, zinc and lead fell in London.

Anglo American lost 2.5 percent to 2536 pence, the most since Jan. 5. The world's second-largest gold producer is performing well and there is ``no pressure'' to sell the 41 percent stake, Anglo American Chief Executive Officer Tony Trahar said today on a conference call in London.

Anglo Buyback

Anglo American also said it will buy back $3 billion of its shares, less than bigger rival BHP Billiton, after second-half profit climbed 93 percent. The Sunday Telegraph reported Feb. 18 that the company could announce a $4 billion share buyback, without saying where it obtained the information.

Alliance & Leicester gained 7.8 percent to 1,149 pence. Net income rose to 221.5 million pounds ($433 million) from 195.9 million pounds a year earlier. That beat the 179.8 million-pound average estimate of 11 analysts surveyed by Bloomberg.

Separately, James Eden, an analyst at Dresdner Kleinwort, raised his recommendation on the stock to ``add'' from ``hold.''

Imperial Tobacco, the maker of Lambert & Butler cigarettes, added 1.9 percent to 2,200 after El Economista said Altria Group Inc. sought the support of Altadis SA to make a bid for the company.

Altria's Philip Morris unit has contacted investment banks to find out if Altadis would help the maker of Marlboro cigarettes in a bid for Imperial, the Spanish newspaper said.

Greg Prager, a spokesman for Altria's Philip Morris International unit, wasn't immediately available to comment on the report. Miguel Angel Martin, a spokesman for Altadis, declined to comment.

The following stocks also rose or fell. Stock symbols are in parentheses after company names.

U.K. companies:

Ben Bailey Plc (BBC LN) jumped 55.5 pence, or 8.7 percent, to 693, the biggest gain in 3 1/2 years. The builder of homes in northern England said it may offer itself for sale.

BT Group Plc (BT/A LN) lost 3.25 pence, or 1 percent, to 309. The largest U.K. phone company's chairman designate, Michael Rake, said he was willing to look at increased indebtedness in order to fund future acquisitions at the U.K.'s largest telecommunications company, the Financial Times reported.

Croda International Plc (CRDA LN) jumped 51.5 pence, or 8.5 percent, to 655. The world's largest maker of chemicals derived from wool grease posted a full-year profit and said it plans to cut 290 jobs after its biggest-ever acquisition. Pretax profit before one-time items totaled 54.3 million pounds ($106 million) compared with a year-earlier loss of 35.3 million pounds.

InterContinental Hotels Group Plc (IHG LN), the owner of the Holiday Inn and Crowne Plaza chains, decreased 23 pence, or 1.8 percent, to 1249, after Deutsche Bank AG lowered its share-price estimate by 2.3 percent to 1095 pence.

InterContinental said yesterday it expects to exceed its goal of adding a total of as many as 60,000 hotel rooms by the end of 2008. Deutsche said it was ``slightly disappointed that the company didn't quantify a new room growth target, merely stating that they would exceed the original target.''

London Capital Group Holdings Plc (LCG LN) gained 5.5 pence, or 3.2 percent, to 178.5. The U.K. betting company specializing in wagers on financial markets said annual profit surged almost eightfold as more people speculated on stock and commodity prices, currencies and interest rates.

Terrace Hill Group Plc (THG LN) lost 8.5 pence, or 6.3 percent, to 125.5. The U.K. property developer said fiscal full- year profit rose 16 percent after it started its first development fund and raised fees. The stock has more than tripled in value since this time last year.

source:www.bloomberg.com