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UK Market Drops

3/20/2012 7:26 AM ET

The UK market fell on Tuesday, after some discouraging news from China killed investor appetite. The Asian markets mostly ended down and the U.S. index futures point to a lower open.

According to reports, an official at China's association of car manufacturers said auto sales would miss its forecast for 2012. Separately, reports quoting BHP's iron ore division president Ian Ashby said the company sees a flattening of iron ore demand from China, and that demand growth would drop to single digits.

The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.29 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 0.92 percent.

The FTSE 100 index is currently falling 1.08 percent.

Miners are under pressure. Anglo American and Antofagasta are declining 3.3 percent and 3.8 percent, respectively. BHP is down 3.1 percent. Fresnillo is falling 4.3 percent.

Cairn Energy reported a sharply wider pre-tax loss from continuing operations for 2011, hurt mainly by unsuccessful exploration costs and impairment that surged from last year, but said it is still hopeful of hitting it big in Greenland. The stock is up 1.9 percent.

Arm Holdings is losing marginally. Barclays raised the stock to "Overweight" from "Equalweight."

ING raised Tesco to "Hold" from "Sell." The stock is up 0.6 percent.

Lender Barclays is losing 2.6 percent and Royal Bank of Scotland is declining 3.2 percent.

Elsewhere in Europe, the German DAX is retreating 1.40 percent and the French CAC 40 is losing 1.25 percent. Switzerland's SMI is falling 0.49 percent.

In economic news, Germany's producer price inflation eased for the fifth month to a 20-month low in February, data from the Federal Statistical Office showed. The producer price index increased 3.2 percent annually in February in line with economists' expectations, slower than the 3.4 percent rise in January.

U.K. annual inflation slowed further in February to the lowest level since November 2010, data from the Office for National Statistics revealed. Consumer price annual inflation slowed to 3.4 percent in February from 3.6 percent in January.

Across Asia/Pacific, Australia's All Ordinaries lost 0.36 percent, China's Shanghai Composite Index retreated 1.4 percent and Hong Kong's Hang Seng declined 1.08 percent. The Japanese market is closed for a public holiday.

In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dow edged up 0.1 percent, the Nasdaq climbed 0.8 percent and the S&P 500 rose 0.4 percent, partly due to positive sentiment generated by tech giant Apple's announcement of plans to initiate a dividend and a share repurchase program.

In the commodity space, crude for April delivery is sliding $0.75 to $107.34 per barrel and April gold is falling $17 to $1650.3 a troy ounce.

by RTT Staff Writer

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