LONDON MARKETS: Tesco, BHP Drop In Weak U.K. Market

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Most U.K. stocks moved lower on Wednesday, with shares of BHP Billiton PLC and Tesco PLC among major decliners on earnings reports.

The FTSE 100 index dropped 0.8% to 6,257.22, on track for its fourth straight day of losses.

Shares of supermarket retailer Tesco (TSCDY) gave up 3.3%, after reporting its first drop in earnings in 19 years, as write-downs wiped out much of the profit. Net profit fell to 124 million pounds ($190 million) from GBP2.81 billion last year.

Heavyweight mining firm BHP Billiton PLC (BHP) dropped 2.2%, after saying iron-ore production was 5% lower in third quarter compared to the prior quarter.

Other miners tracked BHP lower, with shares of Rio Tinto PLC (RIO) off 2.5%, Anglo American PLC dropping 1.5% and Vedanta Resources PLC losing 2.1%.

Metals prices were mostly lower.

Oil prices were also on the decline, adding pressure on U.K. oil firms. Royal Dutch Shell PLC (RDSB) dropped 1.5%, BG Group PLC lost 2.5% and BP PLC (BP) fell 1%.

On a more upbeat note in London, shares of Burberry Group PLC (BURBY) jumped 3.7%. The luxury retailer reported a rise in second-half comparable sales, helped by strong sales in outerwear and men's clothing.

On the data front in the U.K., the Office for National Statistics said unemployment in the first quarter rose to 7.9% in the three-month period to February, up 0.2 percentage points from September to November last year.

Additionally in the U.K., minutes from the Bank of England's April meeting showed the nine-member policy-setting committee voted unanimously to keep rates at a record low 0.5%, while three members, including Gov. Mervyn King, voted for an increase in asset purchases.

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