Bears tighten grip on UK stocks

UK stocks declined for a third day as investors speculated that the slowdown in the US economy may derail global economic growth. Xstrata slid three per cent, leading a retreat by mining companies, after posting earnings that missed analysts\' estimates. Hargreaves Lansdown and Shire led the FTSE 100 Index lower, losing more than 3 per cent. The FTSE 100 fell 38.13, or 0.7 per cent, to 5,736.3 at 11:49am in London. The benchmark measure has slumped 5.8 per cent since its peak this year on February 8 amid concern that slowing growth in the US and Europe will stall the economic recovery. The FTSE All-Share Index also dropped 0.7 per cent Tuesday, while Ireland\'s ISEQ Index retreated 0.6 per cent. \"Monday\'s US data shows how fragile sentiment is and how quickly the market can turn,\" said David Jones, chief market strategist at IG Index in London. \"People feel very nervous at the moment.\" Article continues below The House of Representatives approved legislation on Monday to increase the US debt limit by $2.1 trillion and cut federal spending by $2.4 trillion. The Senate voted on the deal Tuesday. Reduction The US deficit deal will add to a reduction in growth next year of 1.5 percentage points coming from the expiration of past stimulus programmes, according to economists at JPMorgan Chase & Co. and Deutsche Bank Securities. Consumer spending in the US stagnated in June, according to the median estimate of 77 economists surveyed by Bloomberg News. Economists said a slump in hiring caused households to cut back on outgoings. The was released yesterday. Xstrata sank 3 per cent to 1,242 pence after posting first half earnings before interest, taxes, depreciation and amortization that increased 30 per cent to $5.82 billion. That missed the average analyst estimate of $5.93 billion. Rio Tinto Group, the world\'s second-largest mining company, fell 2.3 per cent to 4,183 pence. BHP Billiton, the world\'s biggest, dropped 1.6 per cent to 2,223 pence. Hargreaves Lansdown, Britain\'s largest retail broker, slumped 9.2 per cent to 526.5 pence, its biggest drop since April 2009. The UK\'s Financial Services Authority published rules requiring independent financial advisers to disclose fees they receive for directing clients into certain funds. The rules come into effect from the end of next year. The proposals won\'t have a material effect on Hargreaves\'s business, the Bristol-based company said in a statement. Shire Shire, the Irish maker of treatments for attention-deficit disorder, slid 3.1 per cent to 2,033 pence after JPMorgan Chase & Co downgraded the shares to \"neutral\" from \"overweight\" and said speculation about a takeover offer is \"unlikely to be realised.\"