U.K. Stocks Retreat, Ending Five-Day Rally for FTSE 100 Index

U.K. stocks dropped after data on U.S. manufacturing and jobs fell short of economists’ estimates and shares traded without the right to their latest dividend, dragging the benchmark FTSE 100 (UKX) Index lower.

AZ Electronic Materials SA slumped 7.7 percent, leading a retreat on the FTSE 250 Index, as funds managed by Carlyle Group and Vestar Capital Partners sell 80 million shares. Hammerson Plc (HMSO) climbed 1.4 percent after the property developer was raised to “overweight” at Morgan Stanley.

The FTSE 100 lost 61.38, or 1 percent, to 5,928.61 at the 4:30 p.m. close in London, the first decline in six days. The measure slid 1.3 percent last month amid renewed concern that Greece will default on its debts and speculation the economic recovery may falter. The FTSE All-Share Index (ASX) fell 0.9 percent today, while Ireland’s ISEQ Index (ISEQ) advanced 0.3 percent.

“The U.S. ISM numbers and ADP jobs report both cast doubts over the strength of the American economic recovery,” said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Plc in London. “Along with the ongoing uncertainty concerning the Greek situation and possible European contagion, investors are tending to stand away from this fragile market at present.”

Companies in the U.S. added 38,000 workers to payrolls in May, according to figures from ADP Employer Services. The median estimate in a Bloomberg News survey of economists called for a 175,000 advance.

U.S., China Manufacturing

The Institute for Supply Management’s U.S. factory index fell to 53.5 in May from 60.4 in April, the Tempe, Arizona-based group said. Economists had projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey. (NAPMPMI)

In China, manufacturing expanded at the slowest pace in nine months in May as the government extended a campaign to cool inflation and the property market, a survey of companies indicated.

National Grid Plc (NG/), Vodafone Group Plc (VOD), WPP Plc (WPP), Intertek Group Plc (ITRK) and Capital Shopping Centres Group Plc were among companies on the FTSE 100 that traded without the right to their latest dividend today.

AZ Electronic tumbled 7.7 percent to 312 pence, the biggest slide since its initial public offering last year. The shares are likely to be priced between 302 pence and the market price, according to terms of the deal obtained by Bloomberg News.

Glencore Barred

Glencore International Plc (GLEN) sank 3.2 percent to 513.9 pence. The European Investment Bank has barred the world’s largest listed commodity trader from receiving future loans because of corporate governance concerns and a tax dispute with the Zambia Revenue Authority.

Hammerson climbed 1.4 percent to 486.3 pence.

Tate & Lyle Plc (TATE) surged 5 percent to 651.5 pence, a four-year high, as investors speculated that Bunge Ltd. may bid for the company. The Financial Times’s Alphaville blog said that Bunge may bid 820 pence bid for Tate. Exane BNP Paribas analysts said Bunge would have to issue a lot of equity for any takeover. Deutsche Bank analysts also raised their forecast for the stock.

A Tate & Lyle spokesman declined to comment on any possible bid for the company. A call and e-mail to a spokesman for Bunge were not immediately returned.

G4S Plc (GFS), the security provider for London’s 2012 Olympic Games, climbed 1.8 percent to 291 pence as Banco Espirito Santo SA rated the stock “buy” in new coverage, citing a recovery in developed markets.

“International acquisitions and the potential for cyclical recovery in cash management would present additional catalysts for growth and sentiment,” said David Brockton, an analyst at Espirito Santo in London.

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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