U.K. Stocks Retreat, Led by Sainsbury; Barclays, BHP Decline

U.K. stocks retreated for a third day, paced by J Sainsbury Plc. The shares dropped by a record after Qatar dropped its 10.5 billion-pound ($21.9 billion) bid for Britain's third-largest supermarket company.

Barclays Plc and HBOS Plc led bank stocks lower as HSBC Holdings Plc downgraded the shares, citing potential higher writedowns on debt securities and slower revenue growth. BHP Billiton Ltd. paced a retreat by mining companies as the price of copper declined to a seven-week low in London.

The FTSE 100 Index decreased 40.6, or 0.6 percent, to 6490 at 9:31 a.m. in London. The FTSE All-Share Index slipped 0.6 percent to 3342.29. Ireland's ISEQ Index fell 1.2 percent to 7527.21.

Sainsbury plunged by a record 17 percent to 459 pence after Delta (Two) Ltd., the investment fund backed by the Persian Gulf emirate, dropped its takeover offer for the company.

``You are seeing lending pulled from various takeover targets every day at the moment because people just can't get the kind of speculative lending or borrowing that they thought they were going to get and need,'' said Philip Manduca, who helps manage about $500 million at Titanium Capital Ltd. in London.

Qatar cited ``deterioration'' in the credit markets and said demands by Sainsbury's pension fund made the deal too expensive.

Tesco Plc, the biggest supermarket chain, fell 1.5 percent to 479.5 pence. William Morrison Supermarkets Plc declined 3.2 percent to 283 pence.
all-penny-stocks.com