U.K. stocks fell from their highest level in more than four years as reports showed the economies of Germany and France contracted more than forecast.
Amec Plc tumbled the most in six months as the company failed to renew a share-buyback program when it announced results. Carnival Corp. dropped the most in eight weeks after saying a fire on one of its cruise ships will reduce profit in the first half of the year. Man Group Plc climbed an eighth day for its longest streak of gains in 12 years.
The FTSE 100 fell 31.75 points, or 0.5 percent, to 6,327.36 at the close in London. The equity benchmark rose yesterday to its highest level since May 2008 as companies rallied after reporting earnings. The gauge has still gained 7.3 percent so far this year as U.S. lawmakers agreed on a compromise federal budget. The broader FTSE All-Share Index also declined 0.5 percent today, while Ireland’s ISEQ Index slid 0.1 percent.
“Markets have reacted quite badly to the GDP numbers out of Germany and France,” Richard Scrope, who helps manage about $160 million at Oriel Asset Management LLP in London, said in a phone interview. “Companies have been saying it’s still pretty difficult in Europe and the worse-than-consensus numbers cast a poor light on the economy.”
In Germany, Europe’s largest economy, gross domestic product slid 0.6 percent in the fourth quarter, the Federal Statistics Office in Wiesbaden said in a report. That compared with the 0.5 percent contraction forecast by economists in a Bloomberg survey and a 0.2 percent expansion in the third quarter of last year.
France’s GDP declined 0.3 percent in the same period, the national statistics office said in Paris. The median projection in a Bloomberg survey had called for a 0.2 percent contraction. The combined economy of the 17 nations that use the euro shrank 0.6 percent over the three months through December.
Japan’s economy unexpectedly shrank last quarter, another release showed. GDP fell an annualized 0.4 percent, following a revised 3.8 percent drop in the previous quarter, the Cabinet Office said in Tokyo. The median forecast of economists had called for growth of 0.4 percent.
In the U.S., initial jobless claims decreased by 27,000 to 341,000 in the week ended Feb. 9, Labor Department figures showed. That was lower than the 360,000 average forecast of economists in a Bloomberg survey.
Amec sank 7.3 percent to 1,042 pence as the company said in a statement that it has completed a 400 million-pound ($620 million) share-buyback program. The oil and gas engineer also said its order book at the end of 2012 stood at 3.6 billion pounds, compared with 3.7 billion pounds a year earlier.
Carnival slipped 2.9 percent to 2,500 pence, its biggest drop since Dec. 20, after saying a fire on the Triumph cruise ship will lower its earnings by 8 cents to 10 cents a share in the first half of 2013.
Britvic Plc slid 7.1 percent to 390 pence after the U.K. distributor of Pepsi was downgraded to sell and underweight, respectively, at Societe Generale SA and JPMorgan Chase & Co. and to equal weight, the equivalent of neutral, at Barclays Plc.
The brokerages lowered their recommendations as A.G. Barr Plc called off its planned acquisition of Britvic yesterday after the Office of Fair Trading referred the deal to the Competition Commission. The OFT said the proposed takeover might reduce competition in the soft-drinks market. A.G. Barr, which makes Irn-Bru and Orangina, slipped 2.5 percent to 502.5 pence.
Man Group climbed 2.3 percent to 111.1 pence, its highest price in 10 months, amid reports the company may be bought. Britain’s biggest publicly traded hedge fund was the subject of a “vague bid rumor,” according to the Independent. The Daily Mail also said the company may become a target. Neither newspaper identified the source of the information.
Next Plc added 1.2 percent to 4,182 pence as HSBC Holdings Plc upgraded the shares to overweight from neutral, meaning that investors should own more of the shares than are represented in benchmark indexes. The brokerage cited the clothing retailer’s superior cost management compared with its peers.
The volume of shares changing hands on FTSE 100-listed companies was 9.1 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
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