U.K. Stocks Decline After Climbing to Two-Month High

U.K. stocks slipped after a three-day gain that sent the FTSE 100 Index (UKX) to its highest level since November.

J Sainsbury Plc lost 2 percent after it lowered its full-year sales forecast. WPP Plc fell 1.2 percent after Berenberg Bank recommended avoiding the stock. RSA Insurance Group Plc (RSA) rose 4.3 percent after saying it is confident the Irish accounting irregularities are isolated.

The FTSE 100 lost 27.69 points, or 0.4 percent, to 6,727.76 at 11:06 a.m. in London. The benchmark gauge, which posted the second-smallest rally among developed European markets tracked by Bloomberg in 2013, reached the highest since Nov. 4 yesterday. The broader FTSE All-Share Index declined 0.4 percent today, and Ireland’s ISEQ Index rose 0.2 percent.

“Equities are fully valued and the market seems to have gotten ahead of itself,” said Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England. “There’s a growing polarization of the consumer, and food retailers are struggling. The recovery is sustainable, but it’s not a feel-good recovery.”

Sainsbury slid 2 percent to 361.4 pence. The U.K.’s third-largest supermarket chain said full-year same-store sales will rise “just below” 1 percent, according to Chief Financial Officer John Rogers, less than Sainsbury’s prior guidance for 1 percent to 1.5 percent growth.

Wm Morrison Supermarkets Plc lost 1.5 percent to 249.8 pence. Tesco Plc dropped 1.1 percent to 328 pence.

WPP fell 1.2 percent to 1,351 pence.

RSA Gains

RSA rose 4.3 percent to 101.9 pence, posting the biggest jump among FTSE 100 shares. The company will release further details at 7 a.m. tomorrow, it said in a statement.

International Consolidated Airlines Group Plc gained 1.5 percent to 434.4 pence. The parent of British Airways boosted passenger traffic 5.8 percent in 2013 after buying Spanish discount carrier Vueling SA.

EasyJet Plc (EZJ) rose 1.4 percent to 1,628 pence.

Persimmon Plc (PSN) gained 1 percent to 1,307 pence, after the U.K.’s largest homebuilder said second-half sales climbed 25 percent. Mortgage lender Halifax said house prices in the country will rise further this year, after a 5.7 percent increase in 2013, amid a strengthening economy.

To contact the reporter on this story: Trista Kelley in London at tkelley2@bloomberg.net

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

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