European Stocks Drop on Concern Higher Rates, Oil Prices May Hurt Earnings

(Bloomberg) -- European stocks dropped on
speculation increasing borrowing costs and higher oil prices
will weigh on corporate earnings.

Retail shares fell after Tesco Plc, the U.K.'s largest
supermarket operator, predicted a ``tougher year'' because of
rising interest rates and growing competition. Air France-KLM
Group and British Airways Plc, among the most sensitive to
changes in the price of oil, led travel and leisure stocks to
the lowest in more than two months.


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U.K. Mining Stocks Gain, Led by Shares of Vedanta; Tesco, Retailers Fall

(Bloomberg) -- U.K. mining stocks climbed, led by
Vedanta Resources Plc and BHP Billiton Ltd., after copper rallied
on concern strikes in South America will disrupt production.

Tesco Plc and William Morrison Supermarkets Plc led retailers
lower after minutes showed the Bank of England voted five to four
to keep interest rates unchanged. British Airways Plc rose after
Standard & Poor's lifted its credit rating for the airline. Man
Group Plc gained after assets for its AHL fund increased.


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British Airways Credit-Default Swaps Fall to Record Low on Ratings Upgrade

(Bloomberg) -- British Airways Plc credit-default
swaps fell to a record low after Standard & Poor's lifted its
debt ratings on Europe's third-largest airline to investment
grade for the first time in four years.

Contracts based on 10 million euros ($13 million) of
British Airways debt fell 18,000 euros to 59,500 euros,
according to Deutsche Bank AG. It was the biggest one-day drop
in more than four years for the contracts, which are used to
speculate on a company's ability to repay debts. A decline
indicates improved perceptions of credit quality.


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U.K.'s FTSE 100 Index Retreats, Paced by BA, Imperial Tobacco; Segro Gains

(Bloomberg) -- U.K. stocks declined, paced by
British Airways Plc and Imperial Tobacco Plc. Segro Plc shares
advanced.

The benchmark FTSE 100 Index retreated 15.6, or 0.2
percent, to 6,661.1 at 8:06 a.m. in London. The FTSE All-Share
Index lost 8.51, or 0.3 percent, to 3,458.01. Ireland's ISEQ
Index jumped 108.58, or 1.1 percent, to 9,963.44.


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