EUROPE MARKETS: Mining Stocks Lead Selloff In London On Gloomy Global-growth Outlook

By Carla Mozee, MarketWatch

Tesco upgraded to outperform

LONDON (MarketWatch) -- U.K. stocks dropped sharply Wednesday, led by a slide in mining stocks as copper prices tumbled and the World Bank downgraded its forecast for global growth.

The FTSE 100 fell 1.9% to 6,421.45, hurt even more than other major European benchmarks because of its heavy weighting of commodity-related shares.

Mining stocks logged the worst performances in London trade as copper prices fell to levels not seen since mid-2009 on concerns about a supply glut. Meanwhile, the World Bank on Tuesday said it now expects the global economy to expand 3% in 2015, down from its earlier forecast of 3.4%. Strengthening in the U.S. economy and the fall in oil prices won't be enough to offset troubles in the eurozone and emerging markets, the institution said.

In the mining group, shares of copper producer Antofagasta PLC fell 8%, leading decliners on the FTSE 100, and copper miner Fresnillo PLC dropped 4.9%. Glencore PLC fell 11%, Anglo American PLC lost 10% and Rio Tinto PLC (RIO) declined 5.8%.

BHP Billiton PLC (BHP) shares gave up 7.7%. S&P Capital IQ on Wednesday downgraded its rating on BHP to hold from buy. "We expect weaker commodity prices to increasingly impact on group profits as hedges expire and see currency headwinds from a stronger [U.S. dollar]," Clive Roberts, S&P Capital IQ equity research analyst, said in a Wednesday note.

BHP's next update is due on Jan. 21, with the release of its December 2014 operational review.

For copper, both "the negative momentum and the technical situation suggest that the price slide could continue for the time being," said commodities analysts at Commerzbank in their daily report. But when "prices bottom out, the countermovement could therefore be pronounced."

A few of the FTSE 100's components did advance on Wednesday. Tesco PLC rose 2.3% after a ratings upgrade to outperform from neutral at Exane BNP Paribas. After being "mismanaged," Britain's largest supermarket chain operator "now has a very credible new CEO who is rapidly driving changes, motivating staff and improving sales," analyst John Kershaw wrote.

AstraZeneca PLC (AZN) shares rose 0.5% after the drug maker said a study of its blood-thinning Brilinta tablets showed they reduced the risk of heart attack in patients who have had previous attacks.

Burberry shares climbed 0.9% as the luxury-goods maker posted better-than-expected same-store sales growth for the third quarter.

Barratt Developments PLC edged up 0.2% after the home builder said in its trading statement that its financial performance for the full year is on track for significant improvement.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires