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Most U.K. Stocks Decline After Two-Day Gain; Glaxo Slips

Nov. 12 (Bloomberg) -- Most U.K. stocks declined, snapping a two-day increase, as GlaxoSmithKline Plc slipped after a disappointing drug trial and investors watched financial results from CRH Plc to TalkTalk Telecom Group Plc.

Glaxo was the biggest drag on the FTSE 100 after a coronary heart disease treatment failed to meet the goal of a late-stage study. Countrywide Plc dropped 1.5 percent as its second-largest shareholder sold a 10.2 percent stake. CRH jumped to the highest price in more than three years after the Irish construction company said it may sell further assets. TalkTalk rallied the most in a year after raising its sales-growth forecast.

The FTSE 100 Index retreated 1.58 points, or less than 0.1 percent, to 6,726.79 at the close in London, as five shares fell for every four that rose. The gauge has still soared 14 percent this year as the Federal Reserve maintained stimulus measures. The broader FTSE All-Share Index lost 0.1 percent today, while Ireland’s ISEQ Index climbed 0.6 percent to its highest level in more than five years.

“Short-term we are sounding quite a cautious tone,” Michael O’Sullivan, London-based Credit Suisse Private Banking U.K. chief investment officer, told Anna Edwards on Bloomberg Television. “Many of the tactical indicators in the markets look quite stretched. Institutional investors at this stage are beginning just to pull back and we are now seeing some selling.”

The FTSE 100 is trading at 13.7 times projected earnings, near the highest valuation since the end of 2009, data compiled by Bloomberg show. That compares with the 11.2 average multiple of the past five years.

House Prices

A U.K. house-price index rose last month to the highest in more than a decade, a report from the Royal Institution of Chartered Surveyors showed. The gauge increased to 57, the highest since June 2002, from a revised 53 in September, the London-based group said in a report today, citing a poll of property surveyors.

Glaxo, which makes up 4.6 percent of the FTSE 100, slipped 0.8 percent to 1,637.5 pence. Its darapladib medicine for preventing plaque ruptures didn’t lower the risk of heart attack or stroke in a study involving more than 15,000 patients, according to a statement today.

Countrywide fell 1.5 percent to 530 pence. A fund managed by private-equity firm Apollo Global Management LLC, which in 2007 paid 1 billion pounds ($1.6 billion) for Countrywide, will sell all of its 22.4 million shares in the U.K. company, terms obtained by Bloomberg News showed.

RBS Retreats

Royal Bank of Scotland Group Plc slipped 2.4 percent to 331.6 pence, following its biggest jump in four months, as Goldman Sachs Group Inc. cut its rating on the stock to neutral from buy. The shares have dropped 9.8 percent this month.

John Menzies Plc tumbled 6.4 percent to 767 pence, its largest retreat in almost three years, after saying full-year earnings will be weaker than it previously predicted because of lower sales at its newspaper and magazine distribution unit.

CRH jumped 3.2 percent to 1,609 pence in London trading after reporting a 2 percent gain in third-quarter comparable revenue. The company is reviewing its portfolio to decide on further disposals and will provide details in February next year, according to a statement.

TalkTalk rallied 10 percent to 275.4 pence, the largest jump since November last year. The broadband provider split off from Carphone Warehouse Group Plc said sales will probably advance at least 3 percent in the full-year, up from a previous target for growth of 2 percent.

Oxford Instruments Plc jumped 16 percent to 1,425 pence, its biggest increase in more than three years. The maker of high-technology tools such as X-ray tubes and cryogenic water pumps raised its interim dividend to 3.36 pence a share, from last year’s 3.05 pence, and predicted sales will improve in the second half of the year.

The company also said it made an offer to buy Andor Technology Plc for 500 pence a share. Andor surged 23 percent to 490 pence.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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