UKX FTSE 100 Index

By Carla Mozee and Victor Reklaitis, MarketWatch

Mortgage approvals increase

U.K. stocks dropped Tuesday, with the benchmark index declining for a second straight session as oil shares fell but housing stocks strengthened after encouraging data.

The FTSE 100 dropped 0.4% to end at 6,772.00, adding to Monday's decline of 0.6% (http://www.marketwatch.com/story/ftse-100-stumbles-as-fading-opec-deal-hopes-slam-oil-stocks-2016-11-28), which was the benchmark's first close lower in three sessions.

Oil producers on Tuesday extended losses from Monday on concerns that talks are breaking down before OPEC's formal meeting on Wednesday (http://www.marketwatch.com/story/why-the-opec-meeting-is-likely-to-disappoint-in-one-chart-2016-11-29). The Organization of the Petroleum Exporting Countries has been trying to work out a deal to curb output.

BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) slumped 2.1% and 2% in London trade, respectively, as prices for West Texas Intermediate oil and Brent crude tanked more than 3%.

Read:OPEC oil meeting: 7 things you need to know (http://www.marketwatch.com/story/opec-oil-meeting-7-things-you-need-to-know-2016-11-28)

"The foremost weakness investors have been reminded of is its dependence on stable and preferably rising oil prices," said Ken Odeluga, market analyst at City Index, in a note. "Hence the FTSE has been increasingly range-bound and yet nervy as investors eye this week's discussions among big oil producing nations with some trepidation."

For "the medium term, it is most important that [an OPEC] deal happens at all: for the sake of oil prices, and, in turn, for the oil and gas stocks which constitute the FTSE's single heaviest-sector weighting, of around 14.7%," Odeluga wrote.

Read: Here's how ugly it could get for stocks if OPEC can't reach a deal (http://www.marketwatch.com/story/heres-how-ugly-it-could-get-for-stocks-if-opec-cant-reach-a-deal-2016-11-29)

Mining shares were also under pressure as most metals prices fell, including a drop of more than 2% for copper prices . Antofagasta PLC (ANTO.LN) lost 3.9%, Fresnillo PLC (FRES.LN) shed 3.4%, and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) was down 3%.

Home builders: The sector was moving higher after data showed U.K. mortgage approvals rose in October to 67,518, from 62,932 in September, the Bank of England said Tuesday.

Shares in Barratt Developments (BDEV.LN) were lifted by 2.3%, Persimmon PLC (PSN.LN) tacked on 2%, and Taylor Wimpey PLC (TW.LN) rose 2.1%.

The data is "certainly good news, but we're still cautious about what higher inflation next year will mean for house purchases, as the effect of lower sterling starts to hit disposable incomes," wrote Nicholas Hyett, equity analyst at Hargreaves Lansdown.

Consumer credit increased by GBP1.6 billion in October, which is broadly in line with the average over the previous six months, the central bank said. Consumer credit in September increased by GBP1.4 billion.

In other moves, BT Group PLC (BT.A.LN) finished higher by 1.2% after starting the session in the red. The telecom provider's regulator, Ofcom, said it would require BT to separate its infrastructure arm Openreach (http://www.marketwatch.com/story/bt-must-split-from-openreach-regulator-says-2016-11-29). The move comes after BT failed to offer voluntary proposals that addressed its competition concerns.

The pound bought $1.2500, up moderately from $1.2462 late Monday in New York.

(END) Dow Jones Newswires

November 29, 2016 11:44 ET (16:44 GMT)

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