UK shares fall, dragged by mining companies, Vedanta Resources

UK shares edged lower on Monday, dragged by mining companies after BHP Billiton and Rio Tinto called off a planned join venture. BHP, the world's biggest mining company, lost 38p, or 1.7%, to £21.62, while Rio Tinto shed 100p, or 2.3%, to £40.44. Copper producers Xstrata fell 32p, or 2.4%, to £12.79p, and Antofagasta lost 35p, or 2.7%, to £12.37p, after HSBC lowered both companies to "underweight" from "neutral." Vedanta Resources fell 65p, or 2.8%, to £22.23, after HSBC also lowered its recommendation on the stock to "neutral," from "overweight." The mining company headed by Indian billionaire Anil Agarwal is planning to float its £4bn Zambian copper subsidiary on the London stock exchange to cut debts, the Observer revealed yesterday . Analysts at Liberum Capital expect the group's debt to soar to £7.5bn (higher than Vedanta's £6bn market valuation) once the firm gets Indian government approval to acquire a controlling stake in Cairn India's oil operations, in a deal under discussion since August. The FTSE 100 was down 5.3 points to 5,698 at 10:40am.