U.K. stocks fell from a one-week high, led by commodity producers, after U.S. Secretary of State John Kerry said the Obama administration will hold Syria accountable for chemical-weapon attacks.
BHP Billiton Ltd. and Rio Tinto Group, the world’s biggest mining companies, slid more than 1 percent. Marks & Spencer Group Plc and Next Plc rose at least 1.5 percent as Bank of America Corp. named them its top picks among large European retailers. Petrofac Ltd. rose the most in four years after reporting first-half profit that surpassed estimates and raising its dividend.
The FTSE 100 Index dropped 51.13 points, or 0.8 percent, to 6,440.97 at the close in London. The gauge has lost 5.8 percent since May 22 as the Federal Reserve said it may reduce bond purchases if the economy improves sustainably. The broader FTSE All-Share Index retreated 0.8 percent today, while Ireland’s ISEQ Index lost 2 percent, the most since June 24.
“Syria matters to markets because of potential oil-price fluctuations and any ramifications to the Middle East,” said Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England. “We’ve seen saber-rattling from the U.S. before, but not to this extent. Whilst economic data has been good so far, there are still fears over Fed tapering and fears about higher oil prices related to concern over Syria.”
The volume of shares traded in FTSE 100-listed companies was 18 percent higher than the 30-day average, according to data compiled by Bloomberg.
U.S. Secretary of State John Kerry yesterday said his government will hold Syria accountable for using chemical weapons against residents of a Damascus suburb. Local opposition groups said the attack last week killed more than 1,300 people.
Iran’s Foreign Ministry said today a U.S. military action on Syria would also throw other parts of the Middle East into conflict.
“We want to strongly warn against any use of military force in Syria,” Foreign Ministry spokesman Abbas Araghchi told reporters in Tehran today, in televised comments. “There will definitely be great consequences for the region and complications will not be restricted to Syria, they will engulf the whole region.”
BHP slipped 1.4 percent to 1,883 pence and Rio Tinto slid 2.5 percent to 2,992.5 pence. A gauge of mining stocks in the FTSE 350 Index fell 1.5 percent.
Royal Bank of Scotland Group Plc lost 4.1 percent to 330.1 pence, for its biggest drop in two months. The U.K.’s Parliamentary Commission on Banking Standards said all options for the bank’s structure should be examined “as a matter of urgency,” the Financial Times reported, citing a letter from the group.
Chancellor of the Exchequer George Osborne said in June he will review whether to break up RBS because it still owns too many poor assets for the government to start cutting its 81 percent stake.
Marks & Spencer advanced 1.6 percent to 479.1 pence and Next gained 1.5 percent to 4,990 pence after Bank of America said the companies offer competitive pricing in food and clothing respectively. The brokerage raised its recommendation on Next to buy from neutral.
Separately, Citigroup Inc. upgraded Marks & Spencer to buy from neutral, citing improvements in the U.K.’s economic growth forecasts.
Randgold Resources Ltd. gained 4.1 percent to 5,335 pence as gold climbed to the highest price in more than three months. Fresnillo Plc, which operates silver and gold mines in Mexico, surged 7.1 percent to 1,310 pence.
Petrofac rallied 8.5 percent to 1,373 pence, for its biggest gain since August 2009, after reporting first-half net income of $243 million, exceeding the $224 million-average estimate of analysts surveyed by Bloomberg. The oil-services provider also increased its interim dividend by almost 5 percent to 22 cents a share.