U.K. stocks fall as miners suffer losses

An earlier version of this story misstated the day of the week in the first paragraph. The story has been corrected.

LONDON (MarketWatch) � Britain�s benchmark stock index ended nearly flat on Tuesday, as worries about Greek talks on austerity measures lingered. Mining stocks slipped, led by Xstrata PLC and Glencore International PLC, which announced plans to merge.

The FTSE 100 UK:UKX �ended almost unchanged at 5,890.3, less than 0.1% down from the previous session�s close.

Meanwhile, leaders of the major political parties in Greece were working to agree a deal on another round of austerity measures for the troubled country. Read more about Greek party talks.

Click to Play Xstrata merger augurs more mining deals

The merger of Glencore and Xstrata could create a true rival to global mining heavyweights and pressure midsize players to team up or grow through acquisitions.

Xstrata UK:XTA �was the day�s biggest decliner, dropping 4.9%. The mining firm announced Tuesday that it had reached a deal with commodities trader Glencore UK:GLEN �for an all-share merger of equals, creating a new entity, Glencore Xstrata International PLC. Glencore�s shares sank 3.8%. Read about the Glencore-Xstrata deal

Xstrata also reported preliminary full-year results and posted profit of $5.79 billion in 2011, a 12% rise from a year earlier.

Most other miners endured a second day of tough trading. Eurasian Natural Resources Corp. UK:ENRC �fell 2.6%, Randgold Resources Ltd. UK:RRS �gave up 3.6% and Antofagasta PLC UK:ANTO �fell 2.1%. Heavyweight Rio Tinto PLC UK:RIO UK:RIO �shed 1.9%.

Drug firm GlaxoSmithKline PLC UK:GSK �erased early gains and slid 1% after publishing fourth-quarter earnings. The company swung to a profit of �1.25 billion ($1.64 billion) from a �690 million loss in the year-ago quarter. In a release, the firm said pricing pressure in Europe negatively affected underlying growth and that the trend would continue in 2012, but that sales would grow for the full year.

Mobile-phone operator Vodafone Group PLC UK:VOD �gave back the previous day�s gains and declined by 1.6%.

Luxury retailer Burberry Group PLC lost ground, after data showed retail sales slowed in January. Burberry Group PLC UK:BRBY surrendered 1.8%, while high street chain Next PLC UK:NXT �dropped 0.5%. The British Retail Consortium-KPMG retail sales monitor revealed U.K. same-store retail sales were down 0.3% from January 2011. Supermarket operator Tesco PLC UK:TSCO UK:TSCO , however, managed a 1.5% gain.

Shares of Cairn Energy PLC UK:CNE �added 3.4%. New, ordinary shares in the company began trading in the previous session.

Other oil stocks rose, including Royal Dutch Shell PLC UK:RDSA �and BG Group PLC UK:BG ,�which gained 1.1% and 2.4%, respectively.

In contrast, BP PLC UK:BP �BP �pulled back, after it released its fourth-quarter earnings. The oil giant beat analyst expectations with a 14% rise in adjusted net profit and said it would raise its dividend. BP shares fell 0.6% in London.

However, BP�s share price has surged 64% since hitting a low seen in late June 2010 in the wake of the Gulf of Mexico oil spill.

Utilities stocks pushed higher throughout the session. National Grid PLC UK:NG �advanced 1.1% and Centrica PLC UK:CNA �gained 0.8%.

Most banks ended the day in positive territory, led by Barclays PLC UK:BARC �BCS , which climbed 2.3%. HSBC Holdings PLC UK:HSBA �scored a 0.8% gain and Royal Bank of Scotland Group PLC UK:RBS �RBS �ended up 0.3%.