LONDON MARKETS: Vodafone Leads U.K. Stocks Lower On Verizon Deal

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Vodafone Group PLC led U.K. stocks lower on Tuesday after the telecom firm reached a deal to sell its stake in Verizon Wireless to Verizon Communications Inc. for $130 billion.

Shares of the U.K. heavyweight (VOD) fell 3.8% after the deal, which was announced Monday after the markets closed in Europe. Verizon will pay Vodafone about half of the acquisition in cash and the other half in company stock.

Vodafone said on Tuesday it will launch a 6-billion-pound ($9.35 billion) investment plan called Project Spring to improve 4G networks, increase broadband access and improve customer service.

Shares of Vodafone rallied 8.2% last Thursday when the company confirmed it was in talks with Verizon.

More broadly in London, the FTSE 100 index fell 0.1% to 6,499.85.

Property stocks were among some of the biggest decliners after a round of ratings downgrades from Deutsche Bank. The bank cut British Land Co. PLC , off 1.2%, to hold from buy, and Land Securities Group PLC , off 1.5%, was cut to sell from hold.

"We expect tapering of U.S. quantitative easing over the next 12 months to reduce the liquidity in the global financial system on which property shares thrive. While we do not expect much impact on the direct property market, we expect property shares to suffer while this transition takes place," the analysts said.

On a more upbeat note, mining firms were higher, tracking gains for most metals prices.

Shares of BHP Billiton PLC (BHP) gained 1%, Antofagasta PLC added 0.9% and Rio Tinto PLC (RIO) put on 0.8%.

Shares of Associated British Foods PLC picked up 1% after Exane BNP Paribas lifted the firm to outperform from underperform.

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