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Most U.K. Stocks Fall on Earnings Concern; Burberry Sinks

Most U.K. stocks declined as disappointing company earnings added to signs the global economy is slowing.

Burberry Group Plc (BRBY) sank 7.4 percent after first-quarter sales growth trailed analyst estimates. Aggreko Plc and Johnson Matthey (JMAT) Plc lost at least 3 percent after U.S. peer Cummins Inc. cut its revenue forecast. ARM Holdings Plc and Aviva (AV/) Plc paced advancing shares.

The FTSE 100 Index rose 0.41 point, or less than 0.1 percent, to 5,664.48 at the close in London as investors awaited minutes from last month’s Federal Reserve meeting. The volume of shares changing hands on the gauge was 34 percent lower than the 30-day average, according to Bloomberg data. The broader FTSE All-Share Index slipped 0.1 percent today, while Ireland’s ISEQ Index increased 0.1 percent.

“Markets are in a downbeat mood today with clients holding back from building positions after the second-quarter U.S. earnings season kicked off on a sour note,” said Ishaq Siddiqi, a market strategist at at ETX Capital in London. “All eyes are now on the Fed’s meeting minutes.”

Advanced Micro Devices Inc. plunged 11 percent in U.S. trading yesterday after the second-biggest maker of processors for personal computers reported an unexpected drop in sales. Applied Materials Inc. also declined in New York after the chipmaking-equipment provider cut its forecasts.

Growth Support

The FTSE 100 (UKX) has advanced 7.7 percent from its 2012 low on June 1 as central banks and policy makers took steps to support global growth. The index has risen 1.7 percent this year.

The Fed is scheduled to release the minutes of its June meeting at 2 p.m. in Washington. The Federal Open Market Committee said on June 20 it would expand its Operation Twist program to extend the maturities of assets on its balance sheet.

Burberry dropped 7.4 percent to 1,189 pence after the U.K.’s largest luxury-goods maker reported an 11 percent increase in first-quarter sales to 408 million pounds ($634 million). That missed the average analyst estimate of 417.8 million pounds, according to a Bloomberg survey.

Auto-industry suppliers also fell after Cummins, a U.S. maker of truck engines, reduced its revenue forecast as demand weakens on slowing global growth.

Aggreko (AGK), which is a supplier to Cummins, dropped 4.3 percent to 1,993 pence while Johnson Matthey, a producer of a third of all autocatalysts, slid 3 percent to 2,103 pence. UBS AG also downgraded Johnson Matthey’s shares to neutral from buy.

Britvic Slides

Britvic Plc (BVIC) sank 13 percent to 260.1 pence, the biggest drop since March 2006, after the maker of Robinsons fruit drinks said full-year results will be at the lower end of analyst estimates and warned that a recall of its Fruit Shoot products will hurt earnings further.

Hays Plc lost 3.4 percent to 70.55 pence after the recruitment company reported an easing in like-for-like net fee growth to 2 percent for the fourth quarter. That’s down from 10 percent in the third quarter.

ARM paced advancing shares after Bank of America Corp. resumed coverage of the chipmaker with a buy recommendation. The analysts also named the company their top pick among ARM’s European rivals. The stock climbed 1.6 percent to 488 pence.

Aviva increased 1.5 percent to 290.8 pence as Morgan Stanley upgraded the insurer to overweight, the equivalent of a buy recommendation, saying the company’s restructuring plan that will help “restore capital and profitability.”

Aviva also completed the sale of 37.2 million shares in Delta Lloyd NV.

ICAP Increases

ICAP Plc (IAP) rose 1.2 percent to 314.8 pence after the world’s largest broker of transactions between banks said full-year pretax profit will be in the middle of the 335 million-pound to 365 million-pound range of analyst estimates. ICAP earned 354 million pounds for the 12-month period ended in March 2012.

Chief Executive Officer Michael Spencer said in a statement that widening international probes into a Libor scandal were not a “high concern” as ICAP is not “front and forward” in investigations. The shares have fallen about 12 percent since Barclays Plc was fined 290 million pounds for false Libor submissions.

JD Wetherspoon Plc rose 3.8 percent to 437.9 pence after the pub owner reported a 6.1 percent increase in like-for-like sales for the 11 weeks to July 8.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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

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