U.K. Stocks Slide for Fourth Day as Miners, Tesco Drop

U.K. stocks fell for a fourth day as Tesco Plc (TSCO) reported its first profit drop in almost two decades and as BHP Billiton Ltd. (BHP) led mining companies lower.

Tesco declined 3.5 percent after saying it will leave the U.S. BHP slid to a seven-month low as quarterly iron-ore output missed analysts’ estimates. Burberry Group Plc (BRBY) jumped 2.8 percent as revenue beat forecasts.

The FTSE 100 Index (UKX) retreated 54.78 points, or 0.9 percent, to 6,249.8 at 3:39 p.m. in London. The benchmark, which had gained 0.5 percent at 8:01 a.m., slumped 1.2 percent at 8:51 a.m., before paring losses. The broader FTSE All-Share Index fell 0.8 percent today. Ireland’s ISEQ Index slid 0.7 percent.

“The FTSE has been given little to cheer about from equities, with retail-sector bellwether stock Tesco coming out with their first profits fall in 20 years,” Alastair McCaig, market analyst at IG in London, wrote in a note. “Once again, fear rather than optimism is the overriding factor affecting European traders, and early market rumors of a German debt downgrade have seen the DAX lead the way lower.”

Some 14,000 DAX Index futures contracts expiring in June changed hands in a a five-minute period about 9:50 a.m. in Frankfurt today, more than 15 times the 20-day average volume for that time of day, according to data compiled by Bloomberg.

Risk Off

The FTSE 100 has lost 2.3 percent since April 11 as Chinese economic growth missed forecasts and commodity stocks tumbled, paring its gains so far this year to 6.3 percent.

“We’re seeing some rotation away from risk assets after some economic data missed expectations,” said Guy Foster, head of portfolio strategy at Brewin Dolphin Securities Ltd. in London. “Losses on commodities have prompted traders and hedge funds to shrink their gross exposure to equities. We remain negative on mining stocks.”

Minutes of the Bank of England’s April policy meeting released today showed that Governor Mervyn King was defeated for a third month in a push for more stimulus.

Six of the Monetary Policy Committee voted to keep the target for quantitative easing at 375 billion pounds ($575 billion) this month, the central bank said. King, David Miles and Paul Fisher wanted to increase it by 25 billion pounds.

In the U.S., the Federal Reserve releases its Beige Book report at 2 p.m. New York time. That includes a summary and analysis of economic conditions in 12 U.S. districts.

Tesco Tumbles

Tesco declined 3.5 percent to 371.55 pence, the biggest decrease since Oct. 5. The Cheshunt, England-based company said it will exit the U.S. and scale back U.K. store expansion after posting the first drop in annual profit in almost two decades.

The withdrawal from the U.S. will cut profit by about 1.2 billion pounds, the company said. Tesco also took an 804 million-pound charge to write down the value of properties it no longer plans to develop.

BHP retreated 3.2 percent to 1,782 pence, the lowest price since Sept. 5, after the world’s biggest mining company said third-quarter iron-ore output rose to 40.2 million metric tons, missing the average analyst estimate of 42.3 million tons.

A gauge of miners in the FTSE 350 Index declined 3.1 percent, extending a drop so far this week to 7.1 percent. Rio Tinto Group, the second-biggest miner, slid 3.8 percent to 2,850.5 pence and Xstrata Plc (XTA) lost 2.3 percent to 963.2 pence.

Hikma Review

Hikma Pharmaceuticals Plc (HIK) retreated 5.3 percent to 927 pence, the biggest tumble since March 2012, as the drugmaker said after concluding a review that it won’t sell its injectable-medicine business. The company cited “excellent long-term growth prospects.” Hikma said March 1 it was considering a possible sale after receiving unsolicited approaches for the business.

CPP Group Plc (CPP) plummeted 45 percent to 4 pence after saying it has until Sept. 30 to discuss refinancing terms with its lenders and major shareholder Hamish Macgregor Ogston. The company, which provides protection against credit-card and identity theft, also agreed to sell its North American unit to AMT Warranty Corp. for $40 million.

“The Group is likely to continue to face significant financial challenges in the short to medium term,” the company said in a statement. CPP shares have sunk 80 percent since January.

Burberry rose 2.8 percent to 1,301 pence. The U.K.’s largest luxury-goods maker said fourth-quarter sales rose 11 percent to 503 million pounds, beating the 485.1 million-pound average analyst estimate in a Bloomberg survey.

Hargreaves Lansdown Plc (HL/) climbed 4.6 percent to 941.5 pence, the highest price since it sold shares to the public in 2007, after the U.K.’s largest retail broker reported record net inflows of 1.8 billion pounds in the third quarter.

To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net

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

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