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U.K. Stocks Are Little Changed as U.S. Data Offset Banks

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May 13 (Bloomberg) -- U.K. stocks were little changed as better-than-forecast U.S. retail sales offset declines in Standard Chartered Plc and Lloyds Banking Group Plc.

Standard Chartered slipped 1.9 percent as Carson Block, the short seller who runs Muddy Waters LLC, said he’s betting against the lender’s debt due to deteriorating loan quality. Lloyds lost 1.4 percent. Lonmin Plc gained 2.6 percent after it unexpectedly reported a first-half profit.

The FTSE 100 Index gained 6.78 points, or 0.1 percent, to 6,631.76 at the close in London, its highest level since October 2007. The equity benchmark has risen for eight days, its longest advancing streak since July 2011. The broader FTSE All-Share Index added 0.1 percent today, extending its record high, while Ireland’s ISEQ Index lost 0.1 percent.

“This is an encouraging outcome and given the decent labour market data of late, offers some hope that the US ‘soft patch’ may be short-lived,” said James Knightley, an economist at ING Bank NV in London, referring to today’s U.S. economic data in an e-mail.

The volume of shares changing hands in FTSE 100-listed companies was 15 percent less than the average of the past 30 days, Bloomberg data showed.

Retail sales in the U.S. unexpectedly rose in April, reflecting broad-based gains that may ease concern consumers are holding back. The 0.1 percent increase followed a 0.5 percent drop in March, Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg called for a 0.3 percent drop.

Euro Recession

The euro region is suffering its longest recession since the single currency’s creation, a preliminary report on May 15 may show. Gross domestic product in the 17-nation economy fell 0.1 percent in the first three months of 2013, a sixth straight quarterly decline, according to the median of 39 economists’ forecasts in a Bloomberg survey. That would exceed the 15-month long contraction in 2008-2009.

Still, the Confederation of British Industry, Britain’s biggest business lobby group, said company sentiment on the economic outlook has improved as it maintained its forecast for growth to pick up over the next two years. The CBI published quarterly forecasts today showing that the economy will expand 1 percent this year and 2 percent in 2014, the same as it estimated in February.

Standard Chartered slipped 1.9 percent to 1,552.5 pence. A slowdown in China’s economy will lead to “considerable stress” at the lender, Block said at a conference on May 10. Standard Chartered depends on Asia for more than half of its sales.

Lloyds Chairman

Lloyds lost 1.4 percent to 58.09 pence. Chairman Win Bischoff will retire before May 2014, Britain’s biggest mortgage lender said in a statement today.

International Consolidated Airlines Group SA, the parent of British Airways, retreated 1.9 percent to 270.7 pence amid concern that a new viral outbreak could disrupt travel following increasing evidence of human-to-human spread after France reported its second confirmed coronavirus-related infection yesterday. The virus is related to the one that caused Severe Acute Respiratory Syndrome, or SARS, a decade ago.

Ocado Group Plc tumbled 6.5 percent to 210 pence. U.K. supermarket chain Waitrose Ltd. may object to a deal between the home delivery provider and retailer William Morrison Supermarkets Plc, the Sunday Telegraph reported. Waitrose Managing Director Mark Price said he wouldn’t sign a contract with Ocado agreeing to it working with a competitor, according to the report.

Lonmin gained 2.6 percent to 286 pence. The world’s third-largest platinum producer posted a profit of 13.3 cents a share in the six months through March compared with a loss of 6.3 cents in the year-earlier period. Analysts surveyed by Bloomberg had predicted a loss of 4 cents a share, according to the average estimate.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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