U.K. stocks retreat amid Chinese growth concern; BHP declines

U.K. stocks fell, pushing the benchmark FTSE 100 Index lower for a second day, as concern about slowing growth in China led to a selloff in shares of mining companies.

Rio Tinto Group and BHP Billiton Ltd. both lost at least 3.5 percent after the companies warned of a slowdown in China and as copper inventories in Shanghai climbed last week. Debenhams Plc paced advancing shares after the retailer reported a pickup in sales growth.

The FTSE 100 dropped 1.2 percent to 5,889.79 at 1:06 p.m. in London. The gauge slid from an eight-month high yesterday as Chinese house-price data added to concern that gross domestic product growth is slowing in the world’s second-largest economy. The FTSE-All Share Index lost 1.2 percent today, while Ireland’s ISEQ Index also slid 1.2 percent.

“The Chinese government is trying to manufacture a moderate slowdown,” said Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers in London. “For the time being, investors will take that with a pinch of caution. News of rising fuel prices in China on the back of falling house prices may have damped investor sentiment.”

China, the world’s largest oil consumer after the U.S., yesterday increased gasoline and diesel prices for the second time in less than six weeks after crude last month gained the most in a year.

Rio, BHP Billiton

Rio Tinto, the world’s third-largest mining company, retreated 3.8 percent to 3,476 pence.

“The rate of GDP growth in China is more immediately slowing,” Rio’s David Joyce, managing director of expansion projects, said at a conference in Perth, Australia. “We remain confident on the basis of the figures we have seen, of a soft landing, with solid growth for this year.”

Larger rival BHP lost 3.5 percent to 1,976 pence after the company said China’s steel production is slowing as the country shifts its focus away from large building projects to consumers.

Kazakhmys Plc fell 3.5 percent to 931.5 pence, Antofagasta Plc slid 3.7 percent to 1,200 pence and Vedanta Resources Plc retreated 4.2 percent to 1,358 pence.

Copper slid on the London Metal Exchange on concerns that high inventories in Shanghai won’t be absorbed any time soon. Zinc and nickel also dropped.

Copper inventories at bonded warehouses in Shanghai climbed to 530,000 tons last week, according to the median estimate in a Bloomberg News survey of traders and analysts. This compares with about 200,000 tons in the fourth quarter, said Qu Yi, an analyst at CRU International Ltd.

Debenhams climbed 0.5 percent to 76.1 pence as the U.K.’s second-largest department-store company reported that sales at stores open at least a year rose 2.4 percent in the eight weeks to March 3. Growth for the 26 weeks to that date was 0.3 percent.

Chief Executive Officer Michael Sharp said the retailer is “comfortable” with the outlook for the year.