By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Mining firms drove U.K. stocks lower on Wednesday as metals prices dropped across the board, while Vodafone Group PLC declined after Verizon Communications Inc. said it wasn't interested in making a deal for the firm.

The FTSE 100 index lost 1.1% to 6,420.28, weakening after posting a 1.2% gain on Tuesday.

Shares of Vodafone (VOD) dropped 3.1%, after rising to its highest level in more than five years on Tuesday on reports Verizon Communications Inc. (VZ) and AT&T Inc. (T) were putting together a takeover bid. Verizon said late Tuesday it has no plans to merge with or make an offer for the U.K. telecom firm, although stating it remains interested in buying Vodafone's 45% stake in Verizon Wireless.

Mining firms also posted big losses, tracking metals prices lower. Additionally, UBS cut the materials sector to neutral from overweight.

Shares of Eurasian Natural Resources Corp. dropped 4.6%, Randgold Resources Ltd. lost 3.9%, BHP Billiton PLC (BHP) dropped 2% and Anglo American PLC shaved off 1.4%.

Rio Tinto PLC (RIO) gave up 2%, as reports said the heavyweight miner has put stakes in several Australian thermal coal mines up for sale. A representative from the firm declined to comment.

Banks declined, with shares of Royal Bank of Scotland Group PLC (RBS) down 4.4%, and Barclays PLC off 2.8%.

Among other notable decliners, shares of Experian PLC fell 0.8%, as the information-services firm said it has acquired Decisioning Solutions Inc. for an undisclosed sum.

On Thursday, the attention in London shifts to the Bank of England, where the Monetary Policy Committee announces its decision of its April meeting. At the previous meeting, three out of nine members voted in favor of an increase in asset purchases after a mixed bag of economic data in recent months.

"One factor that seemed to weigh on some members' minds in March was the weakness of sterling, which was still on a downward path at last month's meeting," Philip Shaw, chief economist at Investec Securities, said in a note sent out on Tuesday.

"However since then the pound has recovered around 2% (i.e. a third) of its 6% decline in trade weighted terms since the start of the year and therefore may be less of a barrier if the committee were tempted to ease again this time," he added.

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(END) Dow Jones Newswires

04-03-13 1226ET