Bloomberg News

U.K. Stocks Close Little Changed; FTSE 100 Declines 5.6% in 2011

December 30, 2011

Dec. 30 (Bloomberg) -- U.K. stocks were little changed, with the benchmark FTSE 100 Index posting a 5.6 percent drop this year, amid concern the euro-area debt crisis will hamper equity-market gains into 2012.

Man Group Plc and Old Mutual Plc declined 1.9 percent and 1.7 percent, respectively, for the biggest losses on the benchmark gauge. J Sainsbury Plc climbed 2.3 percent.

The FTSE 100 advanced 5.51, or 0.1 percent, to 5,572.28 at the close in London. The FTSE-All Share Index added 0.2 percent, while Ireland’s ISEQ Index rose 2 percent.

“Europe is going to face a deep recession in the first half of next year,” said Gerard Lyons, the chief economist at Standard Chartered Plc in London. “It’s in terrible shape. Fundamentals are not good, policy stance is terrible and confidence has been shot to pieces.” He spoke in a Bloomberg Television interview with Linda Yueh.

Volumes on the FTSE 100 this week were more than 50 percent below this year’s average, according to data compiled by Bloomberg. Trading in London will close early today for the New Year’s holiday.

Banks, along with metals and mining companies, accounted for the biggest annual declines among Britain’s biggest 350 companies amid concern that the fiscal crisis is spreading to the region’s larger economies. The FTSE 350 Banks and the FTSE 350 Mining Index slumped about 30 percent. Alternative-energy and tobacco companies posted the largest gains as investors sought stocks with profits less tied to economic growth.

The 5.6 percent decline in the FTSE 100 this year compares with an 18 percent tumble in the Euro Stoxx 50 Index and for the MSCI Asia Pacific Index. The Standard & Poor’s 500 Index of U.S. shares rose 0.4 percent this year.

--Editors: Srinivasan Sivabalan, Andrew Rummer

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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


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