U.K. Stocks Decline as BG’s Retreat Outweighs China Data

U.K. stocks declined, after the benchmark FTSE 100 Index (UKX) posted its first weekly gain in a month, as a drop in BG Group Plc outweighed a report that showed Chinese exports rose more than estimated.

BG tumbled the most in 10 months, contributing the most to a decline in the FTSE 100, after lowering its forecast on 2014 production. Tate & Lyle Plc lost 3.4 percent after UBS AG downgraded the shares. Rio Tinto Group paced an advance by U.K. mining companies.

The FTSE 100 Index slid 16.59 points, or 0.3 percent, to 6,530.74 at the close in London. The gauge rose 2.1 percent last week on bets that any reduction in Federal Reserve stimulus will be less steep than previously anticipated and as manufacturing growth beat estimates in the U.S. and China. The broader FTSE All-Share Index slipped 0.2 percent today, while Ireland’s ISEQ Index fell less than 0.1 percent.

“Investors are very sensitive to changes in guidance from BG,” said Guy Foster, a London-based portfolio strategist at Brewin Dolphin Ltd., which manages 28 billion pounds ($44 billion). “They have reiterated their guidance for 2013, which ought to be reassuring, but right now, it’s natural for investors to look for cracks in their production forecasts.”

The volume of shares traded in FTSE 100-listed companies was 7.7 percent lower than the 30-day average, according to data compiled by Bloomberg.

BG Production

BG slid 5.1 percent to 1,217 pence, its biggest drop since Oct. 31, 2012. The U.K.’s third-biggest oil and gas producer said next year’s production will be reduced by 30,000 barrels a day because of unrest in Egypt, a project delay in Norway and lower natural-gas prices in the U.S. BG kept its predictions for 2013 production and reiterated that output will climb to as much as 825,000 barrels of oil equivalent a day in 2015.

Tate & Lyle declined 3.4 percent to 779.5 pence as UBS downgraded the shares to sell, from neutral, saying the stock is too expensive and does not sufficiently reflect the risks of a decrease in sucralose prices. The company, which sells sucralose under the Splenda sweetener brand, is trading at 14 times earnings, compared with 9.6 times a year ago, according to data compiled by Bloomberg.

Associated British Foods Plc (ABF) lost 1.8 percent to 1,818 pence. The U.K. maker of Ryvita crispbread and owner of the Primark budget clothing chain said sugar prices in Europe will remain under pressure. Price negotiations with sugar customers in the European Union are “proving challenging with an increasingly negative sentiment,” the company said.

Mining Companies

A gauge of mining stocks rose as much as the highest level in more than three weeks as data showed China’s exports exceeded forecasts in August. Overseas shipments rose 7.2 percent in August from a year earlier, the General Administration of Customs said. The median prediction of economists surveyed by Bloomberg was for a 5.5 percent increase.

Rio Tinto, the second-biggest commodity producer, advanced 1.1 percent to 3,130.5 pence. Glencore Xstrata Plc added 0.9 percent to 321.3 pence. Anglo American Plc climbed 0.9 percent to 1,594.5 pence.

Burberry Group Plc climbed 2.2 percent to 1,635 pence, its highest price since the luxury-goods maker sold shares to the public in July 2002, after HSBC Holdings Plc added the shares to its “Europe Super Ten” list.

“Short term, we are more positive on sales than the consensus and, as a result, expect upgrades to full-year consensus estimates,” HSBC strategists led by Robert Parkes wrote in a note. The company will benefit from its investments in the digital medium, which will give it a long-term competitive advantage over the rest of the industry, they wrote.

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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