Bloomberg News

U.K. Stocks Are Little Changed; Banks, Mining Companies Decline

February 14, 2012

Feb. 14 (Bloomberg) -- U.K. stocks were little changed after Moody’s Investors Service said it may cut Britain’s top Aaa rating and economic reports showed U.S. retail sales missed forecasts and German investor confidence unexpectedly rose.

Rio Tinto Group, the world’s third-largest mining company, led declines, losing 3.1 percent. Royal Bank of Scotland Group Plc slipped 5.2 percent. Yell Group Plc tumbled 17 percent after saying third-quarter sales fell. Royal Dutch Shell Plc advanced 1.5 percent as a South African refinery partly owned by the company resumed operations.

The FTSE 100 fell 5.83, or 0.1 percent, to 5,899.87 at the close in London, after earlier losing as much as 0.5 percent and gaining 0.3 percent in intraday trading. The gauge has still climbed 19 percent from last year’s lowest level on Oct. 4. The FTSE All-Share Index also lost 0.1 percent today, while Ireland’s ISEQ Index retreated less than 0.1 percent.

“There is a clear lack of love between the FTSE and the 5900 mark, as the market ends its brief sojourn above this level and drops lower once again,” said Chris Beauchamp, market analyst at IG Index. “It is looking as if all the wooing in the world will not succeed in pushing the FTSE higher from here.”

Moody’s said after markets closed yesterday that it may cut the Aaa ratings of the U.K. and France, citing the euro-area debt crisis. The company downgraded the ratings of six other countries in the region, including Spain, Portugal and Italy.

U.S. Retail Sales

Stocks declined earlier as U.S. retail sales rose 0.4 percent in January, half the 0.8 percent increase forecast by economists in a Bloomberg News survey, reflecting an unexpected drop in car purchases.

The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations rose to 5.4 in February from minus 21.6 in January. That’s the highest in 10 months and beat the median economist forecast of minus 11.8, according to data compiled by Bloomberg.

U.K. inflation slowed to its weakest pace in 14 months in January, the Office for National Statistics said today. Consumer prices rose an annual 3.6 percent after a 4.2 percent gain in December. Officials will “pay particular attention” to the outlook for the euro area’s economy, said Bank of England Governor Mervyn King.

Commodity Shares

A gauge of mining stocks retreated 1.7 percent, as copper fell for a third day in New York. Rio Tinto Group fell 3.1 percent to 3,727.5 pence. The company approved a $4.5 billion expansion of Chile’s Escondida copper mine with BHP Billiton Ltd.

BHP Billiton slid 0.5 percent to 2,072 pence.

A gauge of banking stocks fell 1.1 percent. RBS declined 5.2 percent to 26.65 pence, while Lloyds Banking Group Plc receded 2.9 percent to 34.29 pence. HSBC Holdings Plc traded 0.5 percent lower at 561.5 pence.

Yell Group, the publisher of the Yellow Pages directories, plummeted 17 percent to 4.87 pence, its biggest decline since Nov. 16. The company reported that group revenue for the quarter through December fell 15 percent.

Shell climbed 1.5 percent to 2,331.5 pence as oil rose to its highest price in three weeks.

Bunzl Plc, the world’s largest distributor of disposable tableware and food packaging, advanced 3.7 percent to 910.5 pence after it was raised to “overweight” from “neutral” at JPMorgan.

Capita Plc advanced 2.1 percent to 648 pence after the British army selected the company as a recommended supplier for its recruiting partnering project.

-- Editor: Srinivasan Sivabalan

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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


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