U.K. stocks fell from a six-week high as investors awaited tomorrow’s testimony from Federal Reserve Chairman Ben S. Bernanke to help gauge when the U.S. central bank may start to taper its bond purchases.
Persimmon Plc led homebuilders lower, sliding 4.9 percent from a six-year high. TUI Travel Plc and Standard Chartered Plc retreated more than 2.5 percent. Rio Tinto Group climbed 2.7 percent after iron-ore output topped analyst estimates.
The FTSE 100 Index fell 29.76 points, or 0.5 percent, to 6,556.35 at the close in London after swinging between gains and losses at least 20 times today. The gauge has declined 4.2 percent since May 22 after Bernanke said the Fed could pare stimulus measures if the U.S. economy improves. The broader FTSE All-Share Index also slipped 0.5 percent today, while Ireland’s ISEQ Index lost 1.4 percent.
“I’d expect the Fed will be carefully managing its communication since its mishandling from Bernanke’s speech back in May,” said Ian Williams, a market strategist at Peel Hunt LLP in London. “I’d be very surprised if they say anything too different. He will try to put some of the onus back on the government” to support the economy, Williams said.
Bernanke will deliver his semi-annual monetary policy testimony to lawmakers in Congress tomorrow and Thursday. While he last week damped speculation the Fed would slow its bond buying, minutes released the same day of the last policy meeting showed “about half” of participants indicated “it likely would be appropriate” to reduce the program this year.
In Germany, investor confidence dropped in July, adding to signs that Europe’s largest economy is struggling to gather strength. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations fell to 36.3 from 38.5 in June. Economists had forecast a gain to 40, according to the median estimate in a Bloomberg survey.
Persimmon led a selloff in homebuilders, The stock fell 4.9 percent to 1,241 pence after climbing 3.2 percent over the previous three days to the highest price since June 2007.
A gauge of U.K. homebuilders slid 2.2 percent, paring its rally so far this month to 2.6 percent. Barratt Developments Plc sank 4.5 percent to 336.3 pence and Bovis Homes Group Plc declined 3.6 percent to 820.5 pence.
TUI Travel, Europe’s largest tour operator, dropped 3 percent to 365.5 pence, trimming this year’s advance to 29 percent. Standard Chartered, a British bank, declined 2.8 percent to 1,503.5 pence after three days of gains.
Rio Tinto rallied 2.7 percent to 2,883 pence after the world’s second-biggest mining company reported a 7 percent increase in second-quarter ion-ore output to 51.8 million metric tons. That compares with the 51.2 million ton median estimate of seven analysts surveyed by Bloomberg.
The expansion at its Australian iron-ore operations to 290 million tons of annual capacity is also on track to start this quarter, the company said.
Other resources stocks also advanced. Glencore Xstrata Plc rose 1 percent to 264.55 pence, BHP Billiton Ltd. added 1.4 percent to 1,832 pence and Anglo American Plc increased 1.8 percent to 1,324 pence.
Kingfisher Plc gained 1.2 percent to 383.7 pence as Nomura Holdings Inc. raised its rating for general retail shares in Europe to bullish from neutral. Nomura upgraded Kingfisher, the U.K.’s largest home-improvement retailer, to neutral from reduce and raised Dixons Retail Plc and Home Retail Group Plc to buy.
Premier Foods Plc jumped 12 percent to 86 pence as U.K. newspapers including the Guardian and the Daily Telegraph reported takeover speculation, without citing anyone. The company, which has surged 29 percent in three days, has 5.7 percent of shares on loan, an indication of the level of short positions, according to data from Markit. That is down from 8.9 percent in in May and compares with an average of 1.3 percent for all companies on the FTSE All-Share.
The volume of shares changing hands in FTSE 100-listed companies was 2.9 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.