By Carla Mozee, MarketWatch

U.K. stocks slipped Monday, with the benchmark FTSE 100 dented by a decline in shares of Lloyds Banking Group PLC after a ratings downgrade.

The FTSE 100 turned 0.2% lower at 6,950.24, as consumer goods and services, and energy shares moved into the red. The move added to Friday's decline of 0.2% (http://www.marketwatch.com/story/ftse-100-gains-as-sabmiller-rises-but-heads-for-weekly-loss-2015-05-15), when British and European stocks dropped as poor U.S. data underscored concerns about growth in the world's largest economy.

Lloyds shares fell 1.3% as Investec cut its rating on the bank to sell, from hold. Earlier in May, Lloyds shares became the top-performing on the FTSE 100 after a two-week surge in the wake of its first-quarter interim statement and the result of the May 7 U.K. general election, analyst Ian Gordon noted. Lloyd's first-quarter performance was "robust" but broadly in line with Investec's formerly above-consensus forecasts.

Among financials, banking firm Barclays PLC shares were off 0.1%, but Royal Bank of Scotland PLC was up 0.1%.

Earlier in the session, BHP Billiton (BHP) shares were down more than 5%, but have managed to swing higher by 3.5%. They had been under pressure after the overnight trading debut in Australia of new company South32 Ltd. , which comprises BHP's non-core assets. The shares opened at 2.13 Australian dollars ($1.71) each, which was toward the lower end of market expectations, according to Dow Jones Newswires, citing analysts.

But Fresnillo PLC shares have remained solidly higher throughout the session, rising 3.6%. The precious metals miner said it's still on track to boost its output this year (http://www.marketwatch.com/story/fresnillo-reports-rise-in-silver-gold-output-2015-04-15) following an increase in silver and gold output in the first quarter.

Royal Mail PLC picked up 2.6% after Investec upgraded the company's rating to buy from reduce. The move comes after PostNL and private-equity firm LDC in April ended talks about expanding delivery company Whistl in Britain. The suspension of Whistl's service "represents a turning point in Royal Mail's investment case," and Royal Mail "will now deliver all of Whistl's access mail, returning around GBP10 million to revenues and a similar amount to operating profit," wrote Investec.

Babcock International Group PLC shares rose 2.1% after the engineering and defense services company raised its dividend by 10% (http://www.marketwatch.com/story/babcock-lifts-dividend-10-as-yearly-profit-climbs-2015-05-18) and as its full-year pretax profit rose 43% to 313.1 million pounds ($492.4 million). Revenue climbed 20% to GBP4 billion.

There are no key data releases scheduled for Monday.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires