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U.K. Stocks Retreat for a Third Day as BAE Systems Slides

Updated on

U.K. stocks fell, sending the benchmark FTSE 100 Index lower for a third day, as the euro area’s finance ministers delayed a bailout for Greece.

BAE Systems Plc slid 2.3 percent, pacing retreating shares on the FTSE 100, as Europe’s largest defense company said its domestic market will fail to grow this year. African Barrick Gold Plc slumped 14 percent after posting full-year net income that missed analysts’ estimates.

The FTSE 100 declined 6.78, or 0.1 percent, to 5,885.38 at the 4:30 p.m. close in London, after earlier sliding as much as 1.1 percent. The FTSE All-Share Index dropped 0.2 percent, while Ireland’s ISEQ Index was unchanged.

“There will be no winners or losers in this particular little saga as Europe gives the impression of gearing up to cut Greece loose, unless they subjugate to demands for new measures to sate various new concerns,” said Michael Hewson, a markets analyst at CMC Markets in London.

Stocks pared their decline after better-than-estimated housing starts, Philadelphia-area manufacturing and jobless claims data in the U.S., the world’s largest economy.

The euro area’s creditor countries struggled to reach an agreement over a rescue of Greece, seeking more control over how future aid is spent as the country faces the threat of default over a bond payment due on March 20. The 17-nation currency area’s finance ministers will discuss the second bailout at a meeting on Feb. 20, said Luxembourg Prime Minister Jean-Claude Juncker said who chairs meetings of the Eurogroup.

U.S. Bond Buying

U.S. Federal Reserve officials will keep open the option of a third round of bond purchases in case the world’s largest economy weakens or inflation stays low.

“A few” members of the Federal Open Market Committee said economic conditions could warrant buying assets “before long” and others indicated that action would become necessary if the “economy lost momentum” or price gains seemed likely to remain lower than the Fed’s 2 percent goal, according to minutes of their Jan. 24-25 meeting released yesterday in Washington.

The FTSE 100 has still rallied 5.6 percent this year as the European Central Bank increased lending to banks and U.S. economic reports exceeded estimates.

BAE Systems lost 2.3 percent to 325.2 pence. The defense company earlier fell as much as 6 percent after predicting that its domestic market will fail to grow this year. BAE also said that U.S. defense budget cuts will create “uncertainty.”

African Barrick Gold sank 14 percent to 448 pence as the miner of the precious metal in Tanzania said fourth-quarter profit slumped 33 percent on lower output and higher costs. The company also forecast that it will produce the least metal this year since the company listed in London in 2010.

Talvivaara Mining Co. tumbled 14 percent to 281.9 pence after raising 68.8 million pounds ($108.5 million) by selling about 24.6 million shares at 280 pence per share.

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