Bloomberg News

U.K. Stocks Slide as Jobless Claims Climb; Banks, Experian Fall

June 15, 2011

June 15 (Bloomberg) -- U.K. stocks fell after British jobless claims surged more than forecast last month and investors speculated that divisions between European officials may delay a second rescue plan for Greece.

Barclays Plc led a retreat in banks, falling more than 2 percent. Experian Plc slid 1.9 percent amid speculation that the world’s largest credit-checking company may come under increased U.S. regulation. Glencore International Plc led commodity- related shares lower, dropping 5.4 percent.

The FTSE 100 Index dropped 60.58, or 1 percent, to 5,742.55 at the 4:30 p.m. close in London, snapping a two-day rebound. The gauge had fallen for three straight weeks as U.S. payroll reports trailed economists’ forecasts and concern mounted that Greece may default on its debt. The FTSE All-Share Index declined 1 percent today, while Ireland’s ISEQ Index lost 1.1 percent.

“ Traders have found little reason to commit to equities in a big way,” said Manoj Ladwa, a senior trader at ETX Capital in London. “All the ‘risk-on’ assets -- equities, precious metals -- seem to have lost their upside momentum and are rolling over.”

An Office for National Statistics report today showed that U.K. jobless claims jumped 19,600 in May while wage growth slowed, pointing to a continued squeeze on households as inflation accelerates. The median forecast of 22 economists in a Bloomberg News survey called for an increase of 6,500. Wage growth excluding bonuses slowed to 2 percent in the three months through April, the weakest since the quarter through August.

Barclays, RBS, Lloyds

Banks fell after an emergency session of finance ministers in Brussels late yesterday failed to reconcile a German-led push for bondholders to shoulder part of the cost of a new Greek aid package with the European Central Bank’s warning that the move may constitute the euro area’s first sovereign default.

Barclays declined 2.7 percent to 257.4 pence. Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, slid 1.9 percent to 40.8 pence and HSBC Holdings Plc slid 1.2 percent to 608.6 pence.

Separately, Moody’s Investors Service placed the credit ratings of BNP Paribas SA, Societe Generale SA and Credit Agricole SA on review to scrutinize the French banks’ holdings of Greek public and private debt.

Experian Slides

Experian lost 1.9 percent to 785 pence in London on concern that the U.S. Consumer Financial Protection Bureau will place the three major credit-reporting bureaus, including Experian, under direct supervision by federal examiners.

The Dodd-Frank financial regulatory overhaul requires the new agency to propose regulations by July 21, 2012, on whether any company constitutes a “larger participant” in consumer financial services. That designation would lead to supervision similar to that of banks for the three firms, which provide credit reports on borrowers to prospective lenders.

Glencore sank 5.4 percent to 473 pence, extending yesterday’s 4.5 percent selloff after the company reported profit that analysts deemed “disappointing.” Xstrata Plc, which is 34 percent owned by Glencore, dropped 2.6 percent to 1,259.5 pence.

Man Group Plc, the world’s biggest publicly traded hedge fund firm, dropped 3.2 percent to 232.6 pence after the net asset value of its AHL Diversified Futures Ltd. fund declined 0.3 percent last week.

--Editor: Will Hadfield

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus