U.K. stocks declined for the first time in three days as analysts downgraded mining companies and Reckitt Benckiser Plc announced the departure of its Chief Financial Officer.
Vedanta Resources Plc, controlled by Indian billionaire Anil Agarwal, and Lonmin Plc fell more than 1 percent in London. Reckitt, the world’s largest maker of household cleaners, dropped 4.6 percent. Betfair Group Ltd. paced advancing shares, soaring 19 percent on its first day of trade.
The benchmark FTSE 100 Index lost 16.49, or 0.3 percent, to 5,741.37 at the 4:30 p.m. close in London, trimming this week’s gain to 0.7 percent. The FTSE All-Share Index lost 0.3 percent today, while Ireland’s ISEQ Index slid 1 percent.
The market “struggled to gain any upside traction as economic and corporate announcements were thin on the ground,” said London-based Manoj Ladwa, a senior trader at ETX Capital. “Weakness in the mining sector has capped any upside.”
Vedanta, which is planning to buy a controlling stake in Cairn India Ltd., fell 1.9 percent to 2,157 pence as BofA-Merrill Lynch lowered its recommendation for the copper producer to “neutral” from “buy.”
“We now see the potential for delays to the proposed petroleum transaction and recent court/government decisions put the group’s metals growth plans in doubt,” wrote London-based analyst Jason Fairclough in a report to clients. “We believe that investors are increasingly concerned both with the group strategy and management’s ability to deliver on its promises.”
Merrill Lynch upgraded the shares to “buy” from “sell” following the company’s acquisition announcement on Aug. 16, citing the deal as “transformational.” The Indian government said on Oct. 6 that it will decide on the transaction in a “few weeks.”
Yesterday, the Environment Ministry rejected Vedanta’s separate proposed $8.5 billion aluminum expansion plan.
Lonmin Plc fell 1.6 percent to 1,796 pence as a gauge of mining companies trimmed two days of gains. Goldman Sachs Group Inc. downgraded the platinum producer to “sell” from “neutral,” citing valuations. The bank also added Randgold Resources Plc to its “conviction sell” list, saying the stock priced in the “greatest metal price increase” of all the stocks they cover. The shares fell 1.2 percent to 5,970 pence.
Reckitt dropped 4.6 percent to 3,386 pence, the biggest drop since February 2009, after the company said Chief Financial Officer Colin Day will leave after 10 years to focus on “non-executive positions and other career interests.”
Dan Dolev, an analyst at Sanford C. Bernstein said Day, alongside Chief Executive Officer Bart Becht, has been “instrumental” in the company’s growth. Since he joined in 2000, sales have almost tripled and operating profit has risen about sixfold.
Betfair surged 19 percent to 1,550 pence on is first day of trading after the British Internet gambling site raised 221 million pounds ($322 million) in its London initial public offering.
The following stocks also rose or fell in the U.K. and Irish markets. Stock symbols are in parentheses.
Abbey Plc (ABBY ID) gained 25 cents, or 5.9 percent, to
4.50 euros in Dublin trading after the company said it will seek authority to buy back shares when appropriate financial and stock market conditions were in place.
Micro Focus International Plc (MCRO LN) jumped 29 pence, or
7.6 percent, to 411.5 after the Daily Mail reported that International Business Machines Corp. may be mulling a bid for the software maker for as much as 600 pence a share.
“We can see why Micro Focus can be an attractive asset,” wrote London-based Vijay Anand, an analyst at Execution-Noble, in a note to clients. “‘Micro Focus’ migration software offers an alternative to IBM’s mainframe, so IBM can acquire Micro Focus in order to defend its mainframe business.” Anand also cited advantages for Hewlett-Packard Co. and Microsoft Corp.
Provident Financial Plc (PFG LN) increased 35 pence, or 4.5 percent, to 808 as the U.K.’s biggest subprime lender said it has maintained its growth rate for new customers. The company also said the home credit growth rate was 4 percent to 5 percent.
Vitec Group Plc (VTC LN) jumped 34.5 pence, or 7.2 percent, to 515 after the company said business since its first-half results had been stronger than expected. Vitec now anticipates full year results to be ahead of its forecasts.