U.K. stocks fell to a two-month low as Tesco Plc reported its first profit drop in almost two decades and as BHP Billiton Ltd. led mining companies lower.
Tesco declined the most in 15 months after saying it will leave the U.S. BHP slid to a seven-month low as quarterly iron-ore output missed analysts’ estimates. Burberry Group Plc rose 1.8 percent as revenue beat forecasts.
The FTSE 100 Index retreated 60.37 points, or 1 percent, to 6,244.21 at the close in London. The FTSE 100 has lost 2.7 percent since April 11 as Chinese economic growth missed forecasts and commodity stocks tumbled, paring its gains so far this year to 5.9 percent. The broader FTSE All-Share Index fell 0.9 percent today. Ireland’s ISEQ Index slid 1 percent.
“We’re seeing some rotation away from risk assets after some economic data missed expectations,” said Guy Foster, head of portfolio strategy at Brewin Dolphin Securities Ltd. in London. “Losses on commodities have prompted traders and hedge funds to shrink their gross exposure to equities. We remain negative on mining stocks.”
The FTSE 100 reversed early gains amid speculation Germany’s credit rating could be downgraded. The benchmark, which had gained 0.5 percent at 8:01 a.m., slumped 1.2 percent at 8:51 a.m., before paring losses.
Minutes of the Bank of England’s April policy meeting released today showed that Governor Mervyn King was defeated for a third month in a push for more stimulus.
Six of the Monetary Policy Committee voted to keep the target for quantitative easing at 375 billion pounds ($575 billion) this month, the central bank said. King, David Miles and Paul Fisher wanted to increase it by 25 billion pounds.
In the U.S., the Federal Reserve releases its Beige Book report at 2 p.m. New York time. That includes a summary and analysis of economic conditions in 12 U.S. districts.
Tesco fell 3.9 percent to 369.75 pence, the biggest drop since January 2012. The Cheshunt, England-based company said it will exit the U.S. and scale back U.K. store expansion after posting the first drop in annual profit in almost two decades.
The withdrawal from the U.S. will cut profit by about 1.2 billion pounds, the company said. Tesco also took an 804 million-pound charge to write down the value of properties it no longer plans to develop.
BHP retreated 3.4 percent to 1,779 pence, the lowest price since Sept. 5, after the world’s biggest mining company said third-quarter iron-ore output rose to 40.2 million metric tons, missing the average analyst estimate of 42.3 million tons.
A gauge of miners in the FTSE 350 Index declined 3.1 percent, extending a drop so far this week to 7.1 percent. Rio Tinto Group, the second-biggest miner, slid 3.6 percent to 2,854.5 pence and Xstrata Plc lost 1.9 percent to 967 pence.
Hikma Pharmaceuticals Plc retreated 6.2 percent to 917.5 pence, the biggest tumble since August 2011, as the drugmaker said after concluding a review that it won’t sell its injectable-medicine business. The company cited “excellent long-term growth prospects.” Hikma said March 1 it was considering a possible sale after receiving unsolicited approaches for the business.
CPP Group Plc plummeted 45 percent to 4 pence after saying it has until Sept. 30 to discuss refinancing terms with its lenders and major shareholder Hamish Macgregor Ogston. The company, which provides protection against credit-card and identity theft, also agreed to sell its North American unit to AMT Warranty Corp. for $40 million.
“The group is likely to continue to face significant financial challenges in the short to medium term,” the company said in a statement. CPP has sunk 80 percent since January.
Burberry rose 1.8 percent to 1,289 pence. The U.K.’s largest luxury-goods maker said fourth-quarter sales rose 11 percent to 503 million pounds, beating the 485.1 million-pound average analyst estimate in a Bloomberg survey.
Hargreaves Lansdown Plc climbed 5.4 percent to 949 pence, the highest price since it sold shares to the public in 2007, after the U.K.’s largest retail broker reported record net inflows of 1.8 billion pounds in the third quarter.