Bloomberg News

U.K. Stocks Are Little Changed; BP, Tesco, Shire Decline

March 15, 2012

U.K. (SXXP) stocks were little changed as Fitch Ratings said Britain risks losing its top investment-grade rating, while a report showed U.S. jobless claims fell last week.

BP Plc (BP/) led oil and gas shares lower as crude prices fell. Shire Plc (SHP) dropped 3.1 percent after withdrawing a U.S. application for approval of the its Replagal drug for a rare genetic disorder. Hikma Pharmaceuticals Plc retreated 4.3 percent after JPMorgan Chase & Co. advised selling the shares.

The FTSE 100 slid 4.71, less than 0.1 percent, to 5,940.72 at the close in London. The gauge has still rallied 6.6 percent this year as the European Central Bank disbursed 1 trillion euros ($1.3 trillion) of loans to the region’s banks. The FTSE All-Share Index slipped 0.1 percent today, while Ireland’s ISEQ Index gained 1.2 percent as Elan Corp. soared by the most since August.

“It’s been a somewhat mixed day for European markets today with the FTSE lagging behind its European peers, on the back of weaker defensives as well as a weaker oil and gas sector,” said Michael Hewson, a markets analyst at CMC Markets in London.

The number of shares changing hands on the FTSE 100 (UKX) was 14 percent higher than the 30-day average, data compiled by Bloomberg show.

Fitch Ratings said Britain risks losing its top investment grade because of its limited ability to deal with shocks. Fitch changed the outlook on the U.K. (SXXP) to “negative” from “stable,” indicating a “slightly greater” than 50 percent chance that the AAA-rating will be reduced within two years, the company said late yesterday, citing the weak economic recovery, high debt levels and threats from the euro-area debt crisis.

Jobs, Manufacturing

Claims for jobless benefits dropped last week in the U.S., matching the lowest level in four years. Applications for unemployment insurance payments fell by 14,000 to 351,000 in the week ended March 10, Labor Department figures showed today. Economists forecast 357,000, according to the median estimate in a Bloomberg News survey.

Manufacturing in the New York region expanded in March at the fastest pace since June 2010, indicating factories are still driving the expansion.

The Federal Reserve Bank of New York’s general economic index, the so-called Empire State index, unexpectedly increased to 20.2 this month from 19.5 in February. The median forecast in a Bloomberg News survey of economists was 17.5. Readings greater than zero signal expansion in the gauge, which covers New York, northern New Jersey and southern Connecticut.

An index of manufacturing in the Philadelphia region may gain to 12 in March, from 10.2 the previous month, another report may show.

Shire, Hikma

BP fell 1.3 percent to 492.75 pence. Royal Dutch Shell Plc (RDSA) slid 0.7 percent to 2,264 pence. Crude oil retreated for a second day in New York.

Shire fell 3.1 percent to 2,158 pence. The Food and Drug Administration will probably require additional trials to approve Replagal as a treatment for Fabry disease, leading to a “significant delay” in clearance, the Dublin-based company said in a statement late yesterday. The decision won’t affect Shire’s financial forecasts for this year, the company said.

Hikma declined 4.3 percent to 740.5 pence. JPMorgan downgraded the shares to neutral, the equivalent of hold, from overweight.

U.K. Coal, Tesco

U.K. Coal Plc lost 8.2 percent to 19.5 pence, for a second day of declines, after saying it will restructure its business and may close the Daw Mill mine.

Tesco retreated 1 percent to 321.75 pence. Richard Brasher, the head of its biggest unit, will step down from the board and leave the company in July after the U.K.’s largest supermarket chain saw market share slide to seven-year low.

Premier Farnell slid 3.5 percent to 220.9 pence after reporting earnings. Chief Executive Officer Harriet Green said she expects sales growth from the middle of the year.

Game Group Plc (GMG) soared 64 percent to 3.45 pence as the computer games retailer whose stock plummeted earlier this week after suppliers refused to send new products, said it’s in talks for more funding.

Elan rallied 7.4 percent to 10.44 euros, the most since August, in Dublin.

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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