U.K. Stocks Drop After Six Days of Gains as Grocers Slip

U.K. stocks declined, halting a six-day winning streak, as the benchmark FTSE 100 headed for its biggest annual advance since 2009.

J Sainsbury Plc (SBRY), on track for its worst month since March 2011, led supermarket companies lower. Lloyds Banking Group Plc (LLOY) slipped as the Telegraph newspaper reported that the U.K. government may sell its remaining stake in Britain’s biggest mortgage lender next year. A gauge of London-listed mining companies rose a fourth day, for its longest streak in more than three months.

The FTSE 100 Index (UKX) lost 19.60 points, or 0.3 percent, to 6,731.27 at the close of trading in London, following a 2.2 percent climb last week. The gauge has risen 14 percent this year as central banks around the world pledged to leave interest rates low for a prolonged period of time. The FTSE All-Share Index dropped 0.2 percent today and Ireland’s ISEQ Index slid 0.8 percent.

“Expansionary central bank policies have contributed to extraordinary gains for equities this year,” Olle Holmgren, an analyst at SEB AB in Stockholm, wrote in a report today. “We predict that the themes for next year will be similar to this year with low inflation and growth that continues to need support from expansionary central bank policies.”

The volume of shares changing hands in FTSE 100-listed companies was 46 percent below the average of the last 30 days, according to data compiled by Bloomberg. Sixty-eight stocks in the index tracking 101 companies fell today, while 29 rose. The U.K. equity gauge, which closed at its highest level since Nov. 4 last week, posted the second-smallest increase of developed European markets tracked by Bloomberg this year.

House Prices

A report today showed house prices across England and Wales increased 0.5 percent this month from November, according to London-based property researcher Hometrack Ltd. In 2013, prices jumped 4.4 percent, rebounding from a 0.3 percent decline the previous year, Hometrack said.

Sainsbury lost 1.9 percent to 371.1 pence as a gauge of retail stocks dropped the most of the 19 industry groups on the Stoxx Europe 600 Index, a benchmark for the region. Marks & Spencer Group Plc (MKS) declined 1.7 percent to 442.7 pence. William Morrison Supermarkets Plc fell 1.5 percent to 263.7 pence.

Lloyds slipped 0.5 percent to 78.42 pence. The U.K. may sell its remaining 33 percent stake in the bank within the next 12 months through institutional sales and a public offering, the Telegraph reported, citing people familiar with the matter.

Mining Gains

The 15-member FTSE 350 Mining Index gained 0.6 percent to its highest level since Nov. 20, paring its 2013 decline to 16 percent. Anglo American Plc and Polymetal International Plc rose 2.2 percent to 1,338.5 pence and 577.5 pence, respectively.

Vedanta Resources Plc (VED) climbed 4 percent to 937.5 pence. Its subsidiary Sesa Sterlite Ltd., India’s biggest producer of aluminum, zinc and copper, got permission from a committee appointed by the nation’s top court to resume mining at its Karnataka mine.

International Personal Finance Plc (IPF), a lender of small, unsecured cash loans, jumped 10 percent to 501 pence, its biggest gain in five months. Numis Securities Ltd. raised its rating on the stock to buy from hold, saying the shares’ 26 percent decline in the previous two days was overdone.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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