LONDON MARKETS: Miners Rebound In London; Banks, Oil Firms Off

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- U.K. stocks headed for a third straight day of losses on Tuesday, with banks and oil firms leading the charge south, while mining firms recouped some losses suffered in the previous day's selloff.

The FTSE 100 index dropped 0.6% to 6,308.89, adding to a 0.6% loss from Monday.

Posting one of the biggest losses in the index, Associated British Foods PLC dropped 2%, after Credit Suisse cut the firm to neutral from outperform.

"The long-term story remains very good at ABF, but the shares look due a pause for breath," analysts Charlie Mills said in a note.

"The immediate outlook has both positives and negatives--the industry seems to expect EU sugar prices to edge back (though oddly the buyers don't), Chinese sugar losses are increasing and ingredients remain challenging," he said.

On a sector basis, banks were among major decliners, tracking losses for the sector across Europe. Shares of Barclays PLC (BCS) dropped 1.8%, Lloyds Banking Group PLC (LYG) fell 1.3% and Standard Chartered PLC lost 1.2%.

Oil firms were also falling, as oil prices extended losses. Shares of BG Group PLC shaved off 0.7%, BP PLC (BP) erased 0.4% and Royal Dutch Shell PLC (RDSB) slipped 0.5%.

Shares of luxury-goods retailer Burberry Group PLC (BURBY) eased 2.6%, as peer firm LVMH Moët Hennessy Louis Vuitton reported a slowdown in sales growth in its main fashion and leather-goods division.

Bucking the negative trend in London, miners rebounded from a massive selloff on Monday when gold futures plunged $140.30, or 9.3%, the biggest one-day percentage drop since February 1983.

Shares of Eurasian Natural Resources Corp. climbed 4.6%, Fresnillo PLC added 4.2% and Randgold Resources Ltd. gained 3.9%.

Shares of heavyweight Rio Tinto PLC (RIO) rose 1.9%, even as the miner said a landslide at a big U.S. mine last week will dent output by around 125,000 metric tons of copper this year.

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