U.K. stocks fell, with the FTSE 100 Index trimming its 12th straight monthly rally, amid concern the Federal Reserve will reduce its asset purchases.
HSBC Holdings Plc and Royal Bank of Scotland Group Plc led a gauge of lenders lower. Vodafone Group Plc, the second-biggest wireless operator, declined 2.4 percent. RusPetro Plc jumped 9.7 percent after saying it got a loan extension and interest-payment waivers from Sberbank of Russia.
The FTSE 100 dropped 134.84 points, or 2 percent, to 6,627.17 at the close in London, trimming its gain this month to 3.1 percent. The benchmark yesterday surged the most in five weeks as U.S. consumer confidence and house prices increased. The broader FTSE All-Share Index lost 1.9 percent today, while Ireland’s ISEQ Index slid 1.8 percent.
“We’re seeing a bit of a storm in a tea cup,” said Andrew Parry, who oversees about 2 billion euros ($2.6 billion) as chief executive officer of investment management firm Hermes Sourcecap Ltd. in London. “People got somewhat hysterical in their reactions. We can’t say if this is significant until we see U.S. data that shows self-sustaining growth. My only concern is that everyone’s been extraordinarily bullish, more so in the U.S., which could be a bit of a dangerous situation.”
The FTSE 100 has declined 3.1 percent since Fed Chairman Ben. S. Bernanke said on May 22 the central bank may scale back stimulus measures if the U.S. economy improves. The gauge has still advanced 12 percent so far this year.
China’s economy will expand 7.75 percent this year and next, David Lipton, first deputy managing director of the International Monetary Fund, said. In April, the IMF had forecast growth of 8 percent this year and 8.2 percent in 2014.
In Germany, unemployment rose more than four times the estimated number, according to data by the Federal Labor Agency in Nuremberg. The number of people out of work climbed a seasonally adjusted 21,000 to 2.96 million for a fourth month of increase. Economists predicted an increase of 5,000, according to the median estimate in a Bloomberg News survey.
HSBC, Europe’s largest bank, dropped 2.1 percent to 727.6 pence. RBS slipped 1.9 percent to 326 pence. A gauge of lenders listed in London declined 1.7 percent.
Vodafone lost 2.4 percent to 192.95 pence. A measure of telecommunications shares in the Stoxx Europe 600 Index fell 2.2 percent as Barclays Plc wrote that wireless-service revenue of northern European operators fell 9 percent in the first quarter.
National Grid Plc tumbled 5.1 percent to 797 pence, the sharpest drop in three years, after Citigroup Inc. said in a note that rising 10-year Treasury yields may increase the cost of equity for the energy-network operator. The yield on 10-year notes reached 2.23 percent, the highest since April 2012, in intraday trading.
RusPetro surged 9.7 percent to 42.5 pence, the biggest gain since May 3. Sberbank has extended its deadline on payment of a $297.4 million loan until April 2018 and agreed to waive interest payments this year and next if covenants are met, according to the London-listed owner of oil and gas operations in Siberia.