U.K. stocks declined, sending the FTSE 100 Index to the lowest level in one month, amid speculation the U.S. Federal Reserve will start to taper its bond-buying program.
ARM Holdings Plc fell 7 percent, for the biggest drop on the FTSE 100 Index. Tesco Plc led retailers lower, retreating 1.9 percent. Mining companies rose, limiting losses on the benchmark gauge, as base metals advanced in London.
The FTSE 100 slid 57.97 points, or 0.9 percent, to 6,525.12 at the close in London, its lowest level since May 3. The broader FTSE All-Share Index also slipped 0.9 percent today. Ireland was closed for a public holiday.
“With almost no company news of note, investors have been left to concentrate on broader themes,” Chris Beauchamp, market analyst at IG in London. wrote in e-mailed comments. “The nagging fear is that the Federal Reserve’s previously unquestioned commitment to quantitative easing is now looking much less of a sure thing.”
U.S. stocks tumbled at the end of last week, extending declines after the close of European trading on May 31, as better-than-forecast economic data increased concern the Fed will scale back its stimulus measures.
Federal Reserve Bank of San Francisco President John Williams today said policy makers may start reducing the bond purchasing program by the “summer” and probably end quantitative-easing measures by year end.
Data today showed manufacturing in the U.S. unexpectedly contracted in May at the fastest pace in four years, while construction spending in April climbed slower than forecast. In the euro area, manufacturing output contracted less than initially estimated in May, while a U.K. factory index for May expanded more than forecast.
ARM declined 7 percent to 919 pence, its lowest price since April 22, after the company’s U.S.-traded shares dropped 3.7 percent in New York on May 31. ARM, whose products power Apple Inc.’s iPhone and iPad, today announced the introduction of a new line of mobile-processor designs for the mid-range market, which it predicts will almost triple in size in the next two years.
Tesco, the U.K.’s largest retailer, lost 1.9 percent to 358.45 pence. J Sainsbury Plc fell 0.8 percent to 371.5 pence and Marks & Spencer Group Plc retreated 0.9 percent to 466.8 pence and Wm Morrison Supermarkets Plc fell 1.3 percent to 270.3 pence.
Travel companies also declined as crude oil rallied in New York. EasyJet Plc dropped 3.6 percent to 1,221 pence, International Consolidated Airlines Group SA, slid 1.6 percent to 275.2 pence and Carnival Plc fell 3.7 percent to 2,163 pence.
Mining companies paced advancing shares as copper climbed on the London Metal Exchange. Vedanta Resources Plc gained 2.3 percent to 1,291 pence, Antofagasta Plc increased 2.6 percent to 970.5 pence and Glencore Xstrata Plc added 1.1 percent to 326.55 pence.
Tullow Oil Plc rose 1.6 percent to 1,062 pence. The U.K. explorer with most of its licenses in Africa has advanced 3.2 percent in the last three days as it confirmed a report that the government of Ghana had approved its development plan for the Tweneboa, Enyenra, Ntomme oil deposits.
Polymetal International Plc gained 1.9 percent to 703.5 pence after JPMorgan Chase & Co. raised its recommendation for the Russian gold producer to overweight, the equivalent of a buy rating, saying it sees the “dynamics” changing for the company’s earnings in 2014.