U.K. stocks retreat on Plosser stimulus warning, Spain concern

Spanish riots cause markets to retreat

Riot Footage

“We have footage of rioting in Spain, which brings to mind similar images from Greece over the past two years,” said Beauchamp. “The prospect that Spain might prove as truculent as Athens on the subject of reforms is a particularly uncomfortable one.”

A gauge of mining shares listed on the FTSE 350 Index dropped 2.5 percent as copper fell 1.6 percent in London trading. BHP Billiton, the world’s largest mining company, lost 2.1 percent to 1,914 pence. Rio Tinto, the third-biggest, slipped 2.8 percent to 2,858.5 pence. Anglo American Plc slid 3.8 percent to 1,828 pence.

Barclays retreated 4.4 percent to 213.5 pence, Lloyds declined 3.9 percent to 39.03 pence and Standard Chartered Plc slipped 2.6 percent to 1,419 pence. HSBC Holdings Plc, Europe’s biggest bank, decreased 1.5 percent to 575 pence.

ICAP Drops

ICAP slid 4 percent to 330.2 pence after the world’s largest broker of transactions between banks said first-half revenue will be 14 percent lower than a year earlier because of “subdued” capital markets.

Shanks tumbled 9.2 percent to 81.95 pence, the biggest drop since March 2010. The company said “market conditions in the U.K. and Dutch solid waste markets have deteriorated significantly” and forecast that full-year results will be “slightly below” analysts’ current estimates.

Domino’s sank 3.8 percent to 541.5 pence, the largest decline since March 28. Numis lowered its recommendation on the shares to add from buy and Liberum Capital trimmed its estimates for the company’s 2012 and 2013 earnings.

Imagination Technologies Group Plc, a U.K. designer of parts for Apple Inc.’s iPhone, slumped 8.7 percent to 474.9 pence, the lowest price in two months, after Texas Instruments Inc. said it will spend less on its products for smartphones and tablet computers.

Royalty Outlook

Texas Instrument’s announcement is a “material negative” for Imagination, Investec wrote in a report, adding that it’s reviewing its share-price estimate for the company. Liberum Capital said it will have a “negative impact on Imagination’s royalty outlook over the longer term.”

BAE Systems Plc dropped 1.8 percent to 322.3 pence after a German lawmaker questioned the company’s proposed merger with European Aeronautic, Defence & Space Co. EADS Chief Executive Officer Tom Enders wasn’t clear on the benefits of the takeover when addressing a parliamentary hearing in Berlin to discuss the deal, Kerstin Andreae, a Green Party lawmaker and deputy head of the Economic Affairs Committee, said.

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