U.K. stocks fell the most this month amid concern that Greece will struggle to obtain more aid and as HSBC Holdings Plc (HSBA) reported profit that missed estimates.
HSBC, Europe’s largest bank by value, retreated 1.3 percent after making a $800 million provision. Rio Tinto Group and Kazakhmys Plc (KAZ) both slipped more than 2 percent as metal prices dropped. Ryanair Holdings Plc (RYA), the region’s biggest discount airline, climbed 5.8 percent after raising its outlook.
The FTSE 100 Index (UKX) slid 0.5 percent to 5,839.06 at the close of trading in London. The equity benchmark has still rallied 11 percent from this year’s low on June 1 as European Central Bank President Mario Draghi pledged to do everything to protect the euro. The broader FTSE All-Share Index retreated 0.5 today, while Ireland’s ISEQ Index climbed 1.1 percent.
“In order for Greece to receive the next tranche of bailout funds, more budget cuts are needed,” wrote Markus Huber, head of German sales trading at ETX Capital in London. “With not all of the coalition partners potentially in full agreement with these budget cuts, it needs to be seen if these important austerity measures will indeed pass a parliament vote scheduled for this coming Wednesday.”
Greece’s Prime Minister, Antonis Samaras, will seek to obtain approval for austerity measures including wage and pension cuts this week. Greek lawmakers’ first vote on the country’s budget will come as early as Nov. 7.
In the U.S., voters will decide tomorrow between giving President Barack Obama another four years in office or changing course with Republican challenger Mitt Romney.
“Everyone is focused on the election,” said Yves Marcais, an equity sales trader at Global Equities in Paris. “It’s difficult to say who will win, so there is a lot of uncertainty. The market hates uncertainty.”
In the U.K., service industries grew at a slower pace in October than economists had forecast, adding to signs of weakness in the economy at the start of the fourth quarter. A gauge based on a survey of purchasing managers fell to 50.6, a 22-month low, Markit Economics and the Chartered Institute of Purchasing and Supply said in London.
HSBC lost 1.3 percent to 618 pence. Third-quarter underlying pretax profit rose to $5 billion, missing the $5.6 billion median estimate of eight analysts surveyed by Bloomberg.
The bank made today’s provision in addition to $700 million that it set aside in July for any fines after a Senate committee found it had given terrorists and drug cartels access to the U.S. financial system.
Rio Tinto declined 2.2 percent to 3,145 pence. Kazakhmys slipped 2.4 percent to 717.5 pence. Copper, nickel and zinc all retreated in London.
In Dublin, Ryanair soared 5.8 percent to 4.81 euros. The airline’s fiscal second-quarter profit climbed 23 percent to 496.8 million euros ($635 million), exceeding the average analyst estimate of 440 million euros. The company raised its forecast for full-year earnings after increasing its average fare by 7 percent.
Ryanair said it will generate annual earnings of as much as 520 million euros in fiscal 2013, compared with 502.6 million euros in fiscal 2012. The airline had projected profit of between 400 million euros and 440 million euros.
Severfield-Rowen Plc (SFR) plunged 24 percent to 107 pence, its biggest slide since January 2008, after saying two of its businesses have missed its own forecasts.
Inmarsat Plc (ISAT) lost 3.2 percent to 560 pence. The company reported third-quarter earnings that missed analysts’ estimates and said it will bring forward investment next year to prepare for the start of its Global Xpress mobile-data service.
Telecity Group Plc (TCY) tumbled 8.5 percent to 835 pence. Liberum Capital Ltd. said in a note that the company will miss the average analyst projection for earnings per share in 2013. The brokerage reiterated its sell rating on the securities.
Weir Group Plc (WEIR) advanced 4.6 percent to 1,831 pence. The company predicted profit will grow at a double-digit pace this year and that net debt will fall by the end of December.
Centamin Plc (CEY) surged 23 percent to 74.6 pence, paring last week’s 38 percent slump. The Egyptian Mineral Resources Authority said it will appeal a court ruling that stripped the company of a contract to extract gold from the Sukari mine in the North African country.
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