Falling the UK Stocks & The FTSE 100 index

UK stocks fell for a third day led by a decline in banks as an agreement between the leaders of Europe to create a mechanism for crisis management to alleviate the concern that some euro zone nations will no longer pay their debts & The FTSE 100 index fell 0.2 percent to 5,871.75 at the close at 4:30 pm in London early this week cut to 1 percent. The index has risen for three consecutive weeks as China refrained from raising interest rates and economic data bolstered confidence in the U.S. recovery. The FTSE All-Share Index little changed, while the Irish ISEQ Index fell 0.5 percent.
Lloyds Banking Group lost 3.6 percent after saying it expects to report an increased impairment charges due to the Irish loan losses. AstraZeneca Plc slid more than two years after the second largest pharmaceutical company in Britain could not get U.S. approval a blood-thinning medicine. Autonomy Corp. gained 5.3 percent after rumors of purchase and a better than expected earnings in the prognosis of Oracle Corp.

"We are reaching the stage now that the fears of the euro zone debt could have a belt on potential gains to be made next year," said Joshua Raymond, market strategist at City Index in London. "Being a witch days triples, where options and futures contracts expire, and little more than a week after Christmas Day, it seems that traders are in the process to wrap things waiting to leave of absence from the market. "

EU Agreement :

Union leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013, as it struggled to overcome divisions on immediate measures to stabilize the bond market. The mechanism does not solve the current crisis of sovereign debt, economists say as Carsten Brzeski at ING Group NV in Brussels.

Lloyds fell 3.6 percent to 66.5 pence after saying it expects to report a further impairment charge of 4.3 billion pounds (6.7 billion) due to the Irish loan losses. About 10 percent of its 26.7 billion pounds of loans in the Republic is likely to be classified as impaired before the year end, Lloyds said.

Royal Bank of Scotland Group Plc, which currently sells around 3.9 million pounds of project finance assets of Bank of Tokyo-Mitsubishi UFJ Ltd., dropped 5.7 percent to 37.82 pence. Barclays fell 1.4 percent to 259.75 pence.

Financial Stability

The Bank of England said the UK financial stability remains vulnerable to the crisis in Europe of sovereign debt, even after banks were rebuilt and improved the system's resistance.

UK institutions also face risks from a surge in bond yields, rising interest rates, and overheating in emerging markets, the central bank said in its Financial Stability Report published today.

Bank of Ireland Plc fell 14 percent to 31.85 euro cents and Allied Irish Banks Plc lost 1.1 percent to 45 cents.

Moody's Investors Service today downgraded Ireland Baa1 from Aa2 credit, said banks may need to use 10 billion euros (13.3 billion) from a contingency fund of 25 million euros of capital as part of an international rescue plan.

AstraZeneca fell 6.7 percent to 2941 pence, the biggest drop since November 2008, after the drug maker failed to win U.S. approval for Brilinta, rival Plavix, the world's second best selling drug.

The Food and Drug Administration requested additional analysis of a study called Plato Brilinta compared with Plavix in patients with severe chest pain or heart attack before.

Autonomy advances

Autonomy, the second largest software company in the UK, rose 5.3 percent to 1,543 pence. The Daily Mail reported yesterday that the software maker may be the subject of a bidding war between Microsoft Corp. and Oracle in January. The newspaper did not cite anyone.

Autonomy is winning "on the press speculation that it may be a target of the offer from Microsoft or Oracle," said Ben Critchley, a sales trader at IG Index in London.

Moreover, Oracle, the software manufacturer in the world's second largest, and Research In Motion Ltd., maker of the BlackBerry smartphone, profit forecast that topped analysts' forecasts.

Panmure Gordon & Co. raised its estimate of the price of the shares of Autonomy of 1726 pence and reiterated its buy recommendation, saying Oracle's earnings forecast, RIM and Accenture Plc point to a "strengthening of the IT market B2B companies .

Punch Taverns Plc rose 12 percent to 74.45 pence. The British operator of more than 6,700 pubs said that is likely to meet its forecast for the year after its sales rose-management division pubs.

ITE Group Plc, the international organizing events based in London, rallied 12 percent to 244.1 pence after saying it bought International Exhibition Company ZAO by 33 million euros.