LONDON MARKETS: U.K. Stocks Drop Amid European Turmoil
06/14/2012| 09:57am US/Eastern
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Oil producers and miners dragged U.K. stocks into negative territory Thursday amid broader turmoil in European bond and stock markets, as Moody's slashed Spain's credit rating and borrowing costs rose at an Italian bond auction.
The FTSE 100 index fell 0.6% to 5,448.57.
British Sky Broadcasting Group PLC dropped the most in the index, off 5.7%, after news reports said the broadcaster and BT Group PLC (BT) agreed to pay $4.7 billion to secure the rights to broadcast English Premier League games live in the U.K. The price was 70% above the figure paid for the games at the previous auction. Shares of BT Group were also lower, down 3.3%.
BSkyB is held 39.1% by News Corp. (NWSA)(NWS), which is the parent of MarketWatch, The Wall Street Journal and Dow Jones Newswires.
Miners also ranked among big decliners in the FTSE 100.
Shares of Xstrata PLC fell 3.6%, Fresnillo PLC lost 2.5% and BHP Billiton PLC (BHP) shed 2.1%.
Energy-sector shares were further adding pressure in London, with Tullow Oil PLC trading 2.2% lower, BG Group PLC moving down 1.9% and Royal Dutch Shell PLC (RDSA)(RDSB) slipping 0.5%.
The U.K. index tracked negative sentiment across Europe following another day of surging bond yields for Spain and Italy. Late Wednesday, Moody's Investors Service cut Spain's credit rating to Baa3 from A3 and placed it on review for a further downgrade.
In Italy, the government saw borrowing costs jump as it sold its targeted 4.5 billion euros ($5.69 billion) in a key test of market confidence in the Italian economy.
Also figuring in the mix, U.S. jobless claims unexpectedly rose by 6,000 last week to 386,000. Economists surveyed by MarketWatch had projected claims would come in at a seasonally adjusted 376,000.