U.K. stocks slid after Republican leaders in the U.S. canceled a vote on higher taxes for top earners, fueling concern that party members will prevent politicians from agreeing on a compromise budget.
Aviva Plc (AV/) lost 1 percent after the U.K.’s second-biggest insurer by market value agreed to sell its U.S. life unit for $1.8 billion to a division of Leon Black’s Apollo Global Management LLC. Eurasian Natural Resources Corp. fell as Goldman Sachs Group Inc. downgraded the shares.
The FTSE 100 Index (UKX) lost 19.4 points, or 0.3 percent, to 5,938.94 at 3:18 p.m. in London, paring a decline of as much as 0.8 percent. The broader FTSE All-Share Index also fell 0.3 percent today, while Ireland’s ISEQ Index retreated 0.2 percent.
“The markets are tracking the fiscal-cliff developments, and waxing and waning accordingly,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e- mail. “The latest news from the U.S. is implying something of an impasse. As such, levels are likely to remain under pressure until there is some meaningful progress reported.”
The volumes of shares changing hands on the FTSE was 35 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
Republican House Speaker John Boehner abandoned his plan to raise tax rates on annual incomes above $1 million, yielding to resistance from party colleagues. Talks between Boehner and President Barack Obama have already stalled with only days to go before the deadline for a budget compromise.
U.K. consumer confidence fell in December from an 18-month high as optimism about the outlook for the economy plunged, GfK NOP Ltd. said. The London-based research group’s sentiment index declined to minus 29 from minus 22 in November. Economists had forecast a drop to minus 25, according to the median of 21 estimates in a Bloomberg News survey.
Aviva Plc lost 1 percent to 380.2 pence. The insurer will receive $1.55 billion of cash from the sale after it pays off external debt, according to a statement.
ENRC (ENRC) dropped 0.8 percent to 278.5 pence as Goldman Sachs downgraded the producer of metals in Kazakhstan to neutral from buy. The brokerage cited recent strategic announcements by the company, which produces ferroalloys and iron ore as well as copper, for the downgrade.
On Dec. 7, the commodity producer offered $550 million to buy out Israeli billionaire Dan Gertler from a company holding interests in copper and cobalt licenses in the Democratic Republic of Congo. The stock will fail to climb because of concern that it has too much debt, according to Goldman.
United Utilities Group Plc (UU/), the U.K.’s largest publicly traded water company, gained 1 percent to 680.5 pence.
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