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U.K. Stocks Retreat as Ukraine Starts Military Exercises

U.K. stocks retreated, following their biggest weekly decline since January, as Ukraine carried out military exercises and a report showed that China’s exports unexpectedly slumped last month.

BHP Billiton Ltd. and Antofagasta Plc (ANTO) each dropped more than 1 percent as copper slid. Vodafone Group Plc retreated 3.6 percent after people familiar with the matter said the mobile-phone operator has increased its takeover bid for Grupo Corporativo Ono SA. Rolls-Royce (RR/) Holdings Plc added 1.7 percent after Daimler AG said it will sell its half of the pair’s joint venture to the engine manufacturer.

The FTSE 100 Index (UKX) slipped 23.22 points, or 0.4 percent, to 6,689.45 at the close in London. The benchmark declined 1.4 percent last week after Russia’s parliament authorized President Vladimir Putin to deploy troops in Ukraine. The broader FTSE All-Share Index also lost 0.4 percent today, while Ireland’s ISEQ Index also retreated 0.5 percent.

“The negative trade data in China is weighing on markets,” said Kai Fachinger, who oversees about $700 million as portfolio manager at RobecoSAM AG in Zurich. “Investors continue to keep an eye on the geopolitical tensions in Ukraine. M&A activity remains strong and supports sentiment.”

Ukraine’s Defense Ministry said it has begun testing the combat readiness of its troops. The country’s border service said that Russian forces have seized 13 border posts and the ferry service between Crimea and Russia. Crimea holds a referendum on whether to secede from Ukraine on March 16.

China Exports

A report from China’s customs administration showed that exports from the world’s second-biggest economy dropped 18.1 percent in February from a year earlier. Analysts surveyed by Bloomberg had predicted they would increase 7.5 percent.

BHP Billiton slipped 1.4 percent to 1,822 pence and Antofagasta dropped 2.1 percent to 858.5 pence as copper slid 1.6 percent. A gauge of U.K. mining companies lost 1.8 percent. Glencore Xstrata Plc dropped 2.4 percent to 317 pence.

Vodafone declined 3.6 percent to 230.1 pence after people familiar with the matter said the telecommunications operator raised its bid for Ono to about 7 billion euros ($9.7 billion) at a meeting with shareholders Providence Equity Partners and Thomas H. Lee Partners on March 5.

Rolls-Royce gained 1.7 percent to 1,043 pence after Daimler said it will sell its 1.9 billion-pound ($3.2 billion) stake in Rolls-Royce Power Systems under an option that the British manufacturer has held since the joint venture started three years ago. Rolls-Royce, Europe’s largest maker of commercial jet engines, said it has ample liquidity to fund the purchase using existing cash and borrowing facilities.

Centrica (CNA) Gains

Centrica Plc increased 0.9 percent to 327.4 pence after the Financial Times reported that the owner of British Gas still plans to double its earnings from North America. The utility aims to double the profit from its businesses in the U.S. and Canada between 2012 and 2017, the FT said, citing an interview with Chief Executive Officer Sam Laidlaw. Centrica generated 27 percent of its sales from North America last year.

Separately, Credit Suisse Group AG raised the stock to neutral from underperform, meaning that investors should stop selling the shares. The brokerage said that the company has started reducing capital expenditure in its Canadian gas production business.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Will Hadfield, Alan Soughley

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