U.K. Stocks Fall for a Second Day as U.S. ADP Disappoints

U.K. stocks fell for a second day as a report showed U.S. employers added fewer jobs in May than forecast, while investors awaited tomorrow’s European Central Bank meeting.

Tesco Plc dropped 1.3 percent after the U.K.’s largest grocer reported the worst quarterly sales performance this century. J Sainsbury Plc declined 1.9 percent. SABMiller Plc slid 1.2 percent after Morgan Stanley downgraded the shares. Ryanair Holdings Plc gained 2.8 percent after reporting a gain in May traffic.

The FTSE 100 Index (UKX) fell 17.67 points, or 0.3 percent, to 6,818.63 at the close of trading in London. The benchmark gauge has risen 5.7 percent from this year’s low on Feb. 4. The broader FTSE All-Share Index lost 0.2 percent today. Ireland’s ISEQ Index advanced 0.8 percent.

“There is a slight element of selling,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said in a phone interview. “There is a decent chance of disappointment from the ECB because expectations are quite elevated.”

The ECB will announce its interest-rate decision tomorrow. President Mario Draghi signaled last month that he’s comfortable with easing monetary policy.

U.S. companies added 179,000 workers in May, down from a revised 215,000 the previous month, a report from the ADP Research Institute showed today. That missed the median analyst estimate of 210,000.

A Eurostat release showed that the economy in the euro area expanded 0.2 percent in the first quarter, matching the median economist forecast in a Bloomberg News survey. Separate data showed Markit Economics’s purchasing managers’ index for the U.K. services industry came in at 58.6 in May, exceeding projections.

Tesco Drops

Tesco retreated 1.3 percent to 293.5 pence. The grocer reported that sales at U.K. stores open at least a year fell 3.8 percent, excluding gasoline and value-added tax, in the period ended May 24. That was the third straight quarterly drop.

Rival Sainsbury slid 1.9 percent to 327.6 pence.

SABMiller (SAB) fell 1.2 percent to 3,255 pence. Morgan Stanley lowered its rating to equal weight from underweight, meaning that it no longer recommends buying shares in the world’s second-biggest brewer. The brokerage said the company’s valuation reached a peak. The stock rallied 24 percent from its Feb. 5 low through yesterday.

Ryanair rose 2.8 percent to 7.49 euros. Europe’s largest discount airline posted a 4 percent increase in passenger traffic for May.

Sports Direct International Plc climbed 3.6 percent to 799 pence after Exane BNP Paribas added the stock to its key-ideas list.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

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

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