U.K. stocks retreated the most in five weeks as Vodafone Group Plc declined and reports on U.S. companies and service industries trailed economists’ estimates.
Vodafone contributed the most to the FTSE 100’s slide as Verizon Communications Inc. refuted a report that it has considered a bid for the telecommunications company. Kazakhmys Plc and Eurasian Natural Resources Corp. paced a decline by mining shares. Schroders Plc climbed for a third day after Numis Securities Ltd. raised its recommendation on the shares.
The FTSE 100 slid 70.38 points, or 1.1 percent, to 6,420.28 at the close in London, the biggest drop since Feb. 26. The equity benchmark has still rallied 8.9 percent so far this year as U.S. lawmakers agreed on a compromise budget and reports on jobs and housing fueled optimism that the world’s biggest economy is recovering. The FTSE All-Share Index lost 0.9 percent today, while Ireland’s ISEQ Index retreated 1 percent.
“Weaker raw-materials prices are taking a toll on the mining sector,” said Espen Furnes, who helps oversee $75 billion as a fund manager at Storebrand Asset Management in Oslo. “Vodafone is coming down a bit today as the acquisition rumors that did the rounds yesterday cooled down after the Verizon statement.”
The volume of FTSE 100 shares changing hands was 12 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
In the U.S., the ADP Research Institute’s report showed that companies added 158,000 workers in March, compared with a revised 237,000 net hires in February. Economists had projected an increase of 200,000. The Labor Department will publish its monthly non-farm payrolls figures on Friday.
A separate release showed that the services, which account for about 90 percent of the economy, grew at a slower pace last month. The Institute for Supply Management’s non-manufacturing index fell to 54.4 in March from 56 in February. Economists had predicted a reading of 55.5, according to a Bloomberg survey. A reading greater than 50 means that activity increased.
Vodafone lost 3.1 percent to 186.2 pence, the most since November 2011. Verizon denied that it has discussed making a joint bid for the British mobile-phone operator with AT&T Inc.
“As Verizon has said many times, it would be a willing purchaser of the 45 percent stake that Vodafone holds in Verizon Wireless,” the company said late yesterday. “It does not, however, currently have any intention to merge with or make an offer for Vodafone.”
The FTSE 100’s second-biggest stock yesterday rallied to its highest price since November 2007 as the Financial Times’s Alphaville blog reported that AT&T and Verizon have worked on a joint offer for the world’s second-largest mobile-phone company. The blog cited unidentified people.
Kazakhmys slid 5.1 percent to 350.7 pence, while ENRC, a producer of iron ore in Kazakhstan, sank 4.6 percent to 224.6 pence. A gauge of mining stocks in the FTSE 350 Index slid 2.4 percent as Credit Suisse Group AG forecast metal prices will drop this year. Rio Tinto Group, the world’s second-largest mining company, retreated 2 percent to 3,024.5 pence.
Copper, nickel and tin prices all declined in trading on the London Metal Exchange.
Schroders increased 1.4 percent to 2,165 pence as Numis raised its recommendation on the shares to add from hold, meaning that investors should hold more of the securities than are represented in benchmark indexes. The brokerage cited a stronger balance sheet and predicted that the asset manager’s acquisition of Cazenove Capital Holdings Ltd. will lead to higher earnings.