U.K. stocks halted a two-day rally as reports showed that China’s imports slid and a gauge of confidence among Britain’s executives fell to a record low.
Kazakhmys Plc led metal producers higher as Chinese import data fueled speculation the country will opt for further economic stimulus. Xstrata Plc rose 1.2 percent as Glencore International Plc said its revised takeover offer for the Swiss mining company is final. Associated British Foods Plc slid 2 percent, leading so-called defensive companies lower.
The FTSE 100 Index slid 1.6 points, or less than 0.1 percent, to 5,793.2 at the close in London, after retreating as much as 0.3 percent and advancing as much as 0.2 percent. The gauge climbed 1.5 percent last week after European Central Bank policy makers approved an unlimited bond-purchase program. The broader FTSE All-Share Index was also little changed, while Ireland’s ISEQ Index fell 0.1 percent.
“A lot of those hopes for central-bank intervention are going to help sentiment, but I think there will be a lot of volatility near term,” Yogi Dewan, chief executive officer at Hassium Asset Management LLP, said in a phone interview. “With so much uncertainty, we are really quite guarded. We would still sit on the sidelines.”
China’s imports unexpectedly declined, signaling more stimulus may be needed after the government last week said it approved road and subway projects across the country.
Inbound shipments to the world’s second-largest economy slid 2.6 percent in August from a year earlier, while exports rose 2.7 percent, the customs bureau said in Beijing today. Industrial production increased 8.9 percent, the National Bureau of Statistics said yesterday.
“We could be much closer to the tipping point for more policy action as the slowdown in the external sector -- if it were to persist -- may bring more pressure on employment,” Morgan Stanley wrote in a report today.
Investors also await an announcement from the Federal Reserve on Sept. 13, following a two-day meeting of the U.S. central bank’s policy-setting committee, for any evidence of new measures to stimulate the world’s largest economy.
Kazakhmys gained 4.4 percent to 686.5 pence as copper climbed to its highest price in almost four months in London. Kazakhstan’s biggest copper producer was upgraded to buy from sell at UBS AG today. Antofagasta Plc, which mines for copper in Chile, rose 1.9 percent to 1,249 pence and Rio Tinto Group added 1.6 percent to 3,069 pence.
In the U.K., a report from BDO LLP showed that business confidence fell to a record low last month and a gauge of output indicated that the economy will remain weak.
The sentiment reading slipped to 89.1 from 93.1 in July, the accountancy company said in a report today. That was the lowest since the series began in 1992. The output measure dropped to 90.8 from 93.9, further below the 95 mark that points to positive growth one quarter ahead. BDO said the decline suggests growth “is likely to remain elusive in the final quarter.”
Xstrata gained 1.2 percent to 1,026.5 pence, extending its four-day advance to 12 percent. Glencore said today that Xstrata’s Mick Davis will leave six months after a takeover of the Swiss mining company is completed under the sweetened and final terms of its $36 billion offer.
Davis would run the combined group before handing over to Glencore CEO Ivan Glasenberg. That scraps an earlier plan for the Xstrata head to take the job. On Sept. 7, Glencore increased its offer to 3.05 shares for every one in the target, up from its February bid of 2.8 shares.
Marks & Spencer
Marks & Spencer Group Plc added 2.7 percent to 371.1 pence, following a report that bankers have studied debt packages for a buyout of the U.K.’s largest clothing retailer.
Several private-equity firms have approached Marks & Spencer, Reuters reported on Sept. 7, without identifying the bankers. Bloomberg reported on Aug. 24 that CVC Capital Partners Ltd. has explored taking the retailer private, according to people close to the matter.
ABF declined 2 percent to 1,280 pence, paring its rally this year to 16 percent. The retailer said second-half earnings will meet its forecast as sugar sales advance and growth accelerates at its Primark discount-clothing chain.
“We do not expect changes to consensus estimates at this stage,” JPMorgan Chase & Co. analysts wrote in a report today after ABF’s release. ABF “should deliver best-in-class earnings growth.”
SABMiller Plc led a selloff in companies whose earnings are considered less tied to economic growth. The world’s second-largest brewer lost 2.3 percent to 2,700 pence, Unilever, the world’s second-biggest consumer-goods maker, dropped 1.3 percent to 2,245 pence and British American Tobacco Plc slid 1.5 percent to 3,124.5 pence.
“Blue chip defensive stocks” have been consistently weak in the past few days after the European Central Bank approved a plan to lower borrowing costs for euro-area governments, Investec’s Martin Deboo wrote in an e-mail to Bloomberg.
Punch Taverns Plc plunged 9.9 percent to 6.3 pence as Citigroup Inc. lowered its recommendation for the U.K. pub operator to neutral from buy, citing a 20 percent year-to-date rally by pub and restaurant companies.