LONDON MARKETS: Miners Drag FTSE 100 Lower After Gloomy China Data

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- U.K. stocks fell Tuesday, with the benchmark FTSE 100 feeling the weight of losses among miners after poor data from China, but most bank stocks edged up after most major U.K. banks passed the Bank of England's stress tests.

The FTSE 100 fell 0.3% to 6,168.10, with mining stocks weakening after a closely watched report indicated contraction in manufacturing activity in China, a key buyer of commodities. The headline number of HSBC's preliminary or "flash" version of the December manufacturing Purchasing Managers' Index fell to 49.5, a seven-month low. The reading was below the 50 mark that separates overall growth from contraction.

Shares of miners Randgold Resources Ltd. and Fresnillo PLC fell 3.4% and 0.8%, respectively, leading decliners on the FTSE 100. BHP Billiton PLC (BHP) lost 0.6%, and Antofagasta PLC declined 0.7%.

Among banks, Barclays PLC rose 0.7% and Lloyds Banking Group PLC picked up 0.2% after the Bank of England's Prudential Regulation Authority said eight U.K. lenders passed a balance-sheet health check. The Co-operative Bank, which isn't publicly listed, failed the test and needed to submit a revised plan to strengthen its balance sheet.

Shares of state-owned Royal Bank of Scotland Group PLC slipped 0.1%. Also, Standard Chartered PLC was down 0.8% after the Asia-focused company sold its consumer finance units in Hong Kong and Shenzhen in a move to shed noncore assets.

Meanwhile, BT Group PLC (BT) shares were off 0.3% after the telecommunications company said late Monday it's in talks to buy mobile-services provider EE for 12.5 billion pounds ($19.54 billion). There had been speculation that BT would pursue a bid of O2, which is owned by Spain's Telefonica SA (TEF)

(TEF)Investors will look for U.K. government data on inflation in November, released at 9:30 a.m. in London. The indicator is expected to come in at 1.1%, which would be the lowest level since September 2009.

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