U.K. Stocks Fall Most in Two Weeks; Morgan Crucible Sinks

U.K. stocks retreated the most in two weeks as commodity producers fell amid concern about Asian growth and Morgan Crucible (MGCR) Co. cut its forecasts.

Rio Tinto Group, the world’s third-biggest mining company, dropped 1.6 percent as Chinese bank lending missed projections. Morgan Crucible, a maker of body armor, sank 11 percent after saying trading conditions deteriorated across most regions in the third quarter. Bodycote Plc (BOY) and IMI Plc (IMI) lost at least 2 percent. Travis Perkins Plc (TPK) declined 3.6 percent even as the builders’ merchant said it’s on track to meet estimates.

The FTSE 100 Index (UKX) fell 36.43 points, or 0.6 percent, to 5,793.32 at the close in London. That was the biggest decrease since Sept. 28 and extended this week’s decline to 1.3 percent. The FTSE All-Share Index also dropped 0.6 percent today, while Ireland’s ISEQ Index rose 0.3 percent.

“The market is looking very tired and it is certainly not a buy-and-hold environment,” Stewart Richardson, chief investment officer of RMG Wealth Management, said on Bloomberg Television this week. “Fundamentals have been deteriorating now for several months, we’ve had earnings downgrades on a regular basis. That is going to be a trend that continues.”

Shares fell this week as the International Monetary Fund cut its global growth forecasts to the slowest pace since the 2009 recession.

Inadequate Growth

IMF Managing Director Christine Lagarde today said in Tokyo that global growth was not fast enough to curb unemployment. In an interview with the British Broadcasting Corp., Lagarde said the advances in developed economies are “tepid” and that the two main areas of uncertainty are the euro region and the U.S.

China’s new lending was below estimates last month as the government struggles to reverse a slowdown in the world’s second-biggest economy. Banks extended 623.2 billion yuan ($99.5 billion) of local- currency loans, the People’s Bank of China said today. That compared with the median estimate of 700 billion yuan in a Bloomberg survey of economists.

Rio Tinto retreated 1.6 percent to 3,022 pence, the biggest drop in more than two weeks, as copper and lead fell in London trading.

Kazakhmys Plc (KAZ) lost 4.1 percent to 715.5 pence as Barclays Plc (BARC) lowered its recommendation for the copper producer to equal weight, a rating similar to hold, from overweight. Antofagasta Plc (ANTO) declined 3.6 percent to 1,267 pence as HSBC Holdings Plc downgraded the company to underweight from neutral, while Credit Suisse Group AG initiated a “trading sell” on the shares.

Morgan Crucible

Morgan Crucible, which makes carbon materials for medical and transportation equipment, tumbled 11 percent to 227.3 pence, the biggest drop in 14 months, after warning its full-year performance will be “materially below” previous targets.

Chief Executive Officer Mark Robertshaw said he sees a 30 percent “drop through” in profit on lower revenue. Group sales in the third quarter was about 10 percent below the preceding three month, according to a statement.

“This is a disappointing statement and harder than we expected,” Oriel Securities Ltd. analyst Harry Philips wrote in a report to clients today as the brokerage downgraded the stock to hold from buy.

Industrial-goods companies IMI and Bodycote lost 2.3 percent to 904 pence and 6.1 percent to 351.3 pence, respectively. Cookson Group Plc (CKSN), which earlier in the week said its annual performance will fall short of its target, slid 1.7 percent to 530.5 pence.

‘Next Warning’

“Following on from Cookson, it will be a case of spotting the next warning,” Oriel’s Philips wrote in the report. “IMI and Bodycote will top many lists.”

Travis Perkins dropped 3.6 percent to 1,094 pence, trimming this year’s rally to 38 percent. The company said it remains on target to meet analyst projections for earnings and that trading in September saw “noticeable improvement” in sales trends toward the end of the third quarter.

Citigroup Inc. today said consensus estimates for earnings per share may fall by 2 percent to 5 percent because of slowing sales trends.

“We continue to see attractive medium to long-term value in the shares on volume recovery,” Citigroup analysts wrote in a note to clients. “But after a recent strong run, we would not be surprised to see the share price come off.”

Hargreaves Lansdown Plc (HL/) paced advancing shares, rallying 3.5 percent to 712 pence for an eighth day of gains. The U.K.’s largest retail broker reported a 20 percent jump in revenue to 68.7 million pounds ($111 million) for the three months to Sept. 30. Assets under management climbed 2.2 billion pounds to 28.5 billion pounds.

Standard Chartered Plc (STAN) rose 2.3 percent to 1,427.5 pence as UBS AG added the lender to its “key calls” list.

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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