U.K. stocks fell, completing their second monthly decline this year, as reports showed American consumer confidence declined and spending grew at a slower-than-forecast pace.
Royal Dutch Shell Plc and BP Plc slipped as oil declined after Prime Minister David Cameron failed to win parliamentary approval for military strikes against Syria. International Consolidated Airlines Group SA and EasyJet Plc both lost 2.1 percent. Bwin.Party Digital Entertainment Plc plunged the most in more than two years after predicting that sales will fall.
The FTSE 100 Index retreated 70.12 points, or 1.1 percent, to 6,412.93 at the close in London, pushing the gauge to a drop of 1.2 percent this week. The equity benchmark decreased 3.1 percent in August as investors weighed the prospects of reduced monetary stimulus in the U.S. and an attack on Syria. The broader FTSE All-Share Index slid 1 percent today, while Ireland’s ISEQ Index declined 0.1 percent.
“People are sitting on cash in anticipation of things happening,” Frances Hudson, an Edinburgh-based strategist at Standard Life Investments Ltd., which oversees about $278 billion, said in a phone interview today. “Seasonally, risk markets tend to be weaker at this time of the year. Investors have been watching and waiting.”
The Federal Reserve holds a policy meeting on Sept. 17-18 to decide whether to reduce its monthly bond purchases. Germany holds federal elections on Sept. 22, while a committee in Italy on Sept. 9 will hear a case to decide whether the Senate should expel ex-Prime Minister Silvio Berlusconi from his seat.
David Cameron became the first British prime minister in at least 150 years to lose a parliamentary vote on military action. Saudi Arabia raised its military alertness before a potential U.S. strike on Syria, Reuters reported, citing an unidentified person familiar with Saudi’s military.
In the U.S., the final reading of the Thomson Reuters/University of Michigan index of consumer sentiment for this month fell to 82.1, a four-month low, from 85.1 in July. Economists in a Bloomberg survey had called for a reading of 80.5, according to the median projection.
A Commerce Department report showed that consumer purchases, which account for about 70 percent of the economy, rose 0.1 percent in July, less than the 0.3 percent median forecast of economists in a Bloomberg survey. Consumer spending increased a revised 0.6 percent in June.
In the U.K., a measure of consumer confidence climbed to the highest level in almost four years this month, a report by GfK NOP Ltd. showed today.
Shell and BP, Europe’s biggest oil companies, retreated 1.4 percent to 2,087.5 pence and 1 percent to 446.2 pence, respectively. West Texas Intermediate crude dropped 1.2 percent to $107.51 a barrel in electronic trading on the New York Mercantile Exchange.
IAG, the owner of British Airways, lost 2.1 percent to 286.3 pence. EasyJet, Europe’s second-largest discount carrier, retreated 2.1 percent to 1,233 pence.
Bwin.Party plunged 14 percent to 110 pence. The online gambling company forecast that this year’s revenue will probably drop 14 percent to 17 percent from last year. The average analyst projection had called for a decline of 9.2 percent in a Bloomberg survey.
Aviva Plc declined 2.5 percent to 386.8 pence. Barclays Plc reiterated an underweight, or sell, recommendation on the the U.K.’s second-biggest insurer by market value, saying “investors have given too much credit for progress” to management’s plans.
Vodafone Group Plc advanced 0.7 percent to 206.3 pence, extending yesterday’s 8.2 percent jump. Bank of America Corp. analysts wrote that Europe’s largest mobile-phone operator may spend about $35 billion on a share buyback if it sells its stake in Verizon Wireless. The company may also choose to pay a special dividend and cut debt.
Vodafone’s planned sale of its stake in Verizon Wireless would mark its second deal exceeding $100 billion, giving the British carrier an opportunity to transform itself and compensating investors who have suffered a decade of writedowns.