Bloomberg News

U.K. Stocks Are Little Changed; Man Group, Randgold Shares Gain

June 22, 2011

June 22 (Bloomberg) -- The U.K.’s FTSE 100 Index closed little changed, failing to extend yesterday’s biggest rally for the benchmark gauge in two months, as a retreat by Barclays Plc offset a surge in Man Group Plc.

Barclays lost more than 2 percent as HSBC Holdings Plc downgraded U.K. lenders. Man Group jumped 4.9 percent as analysts recommended the hedge-fund manager, while Randgold Resources Ltd. climbed with the price of gold.

The FTSE 100 slid 2.32, or less than 0.1 percent, to 5,772.99 at the 4:30 p.m. close in London after earlier falling as much as 0.6 percent. The FTSE All-Share Index retreated 0.1 percent today, while Ireland’s ISEQ Index gained less than 0.1 percent.

U.K. stocks rallied the most since April 20 yesterday as investors anticipated that Greek Prime Minister George Papandreou would win a confidence vote in his government.

Papandreou won the vote with 155 out of 300 lawmakers backing the motion in Athens last night. The Greek government still needs parliamentary approval next week for a 78 billion- euro ($112 billion) package of budget cuts.

“Markets are less than convinced about the validity of the Greek vote of confidence,” said David Buik of BGC Partners in London. “No surprise that banks have been given a bit of a whipping.”

Barclays, the U.K.’s second-largest bank, fell 2.6 percent to 252.3 pence, while RBS lost 0.7 percent to 38.7 pence and Lloyds Banking Group Plc slipped 0.7 percent to 47 pence.

HSBC lowered its recommendation for all three lenders to “neutral” from “overweight,” warning that proposals from the Independent Commission on Banking to ring fence retail and investment banking units may cost the companies as much as 10 billion pounds ($16.1 billion).

Man Group Rallies

Man Group paced advancing shares, surging 4.9 percent to 241.8 pence after Goldman Sachs Group Inc. initiated coverage of the world’s biggest publicly traded hedge fund with a “buy” recommendation and Credit Suisse Group AG upgraded the stock to “outperform” from “neutral.”

Separately, the Daily Mail reported that JPMorgan Chase & Co. may be preparing a 400 pence-a-share friendly takeover offer for Man. The newspaper did not cite anyone.

Randgold, a miner of the metal in west Africa, rallied 3 percent to 4,928 pence as gold climbed to a seven-week high in New York. African Barrick Gold Ltd. rose 1.3 percent to 405 pence.

Dixons Jumps

Dixons Retail Plc surged 7.7 percent to 16.5 pence on the broader FTSE All-Share after the London-based Times reported that Best Buy Co. may be interested in acquiring the U.K. retailer, without citing anyone. Dixons shares dropped 13 percent in the previous five days.

Cable & Wireless Worldwide Plc dropped 2.5 percent to 49.9 pence after the shares rallied 8 percent over the previous two days. The company late yesterday said it had rejected an approach for its global business division.

The Financial Times reported on June 19 that the U.K. telecommunications company is considering selling most of its international assets.

--With assistance from Adria Cimino in Paris. Editor: Will Hadfield

To contact the reporters 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


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