U.K. stocks were little changed, with the benchmark FTSE 100 Index heading for its sixth weekly loss, as investors weighed the timing of any reduction in monetary stimulus from the Federal Reserve.
AstraZeneca Plc rose 1.8 percent after advisers to the U.S. drug regulator recommended the approval of its diabetes treatment. ARM Holdings Plc gained the most in almost two months after announcing an acquisition. RSA Insurance Group Plc plunged to an eight-year low after Chief Executive Officer Simon Lee resigned and the company said higher reserves related to an investigation at its Irish unit will reduce 2013 earnings.
The FTSE 100 Index lost 5.29 points, less than 0.1 percent, to 6,439.96 at the close of trading. The gauge completed its longest streak of weekly declines since July 2008, falling 1.7 percent, as investors weighed valuations and U.S. economic data fueled speculation the Fed will decide to slow the pace of its bond-buying as soon as next week. The broader FTSE All-Share Index lost less than 0.1 percent today, while Ireland’s ISEQ Index declined 0.2 percent.
“Investor confidence has not gone,” Leigh Himsworth, who helps oversee about $1 billion as head of U.K. equities at City Financial Investment Co. in London, said. “People have been thinking of locking down what has been a fantastic year for total return, as valuations had looked a bit stretched. The market is comfortable with the idea that stimulus needs to be turned off soon, but the scope of this still needs to be communicated to the market.”
The FTSE 100 trades at 13.4 times its members’ projected earnings, down from a high of 13.8 times on Nov. 18. That compares with a five-year average price-earnings ratio of 11.4 times, according to data compiled by Bloomberg.
The Fed has said it may reduce its $85 billion in monthly bond purchases if the economy improves in line with its forecasts. About 34 percent of economists surveyed by Bloomberg on Dec. 6 said the Federal Open Market Committee will probably decide to slow the pace of purchases at its Dec. 17-18 meeting. The rest predicted tapering will start next year.
AstraZeneca gained 1.8 percent to 3,518.5 pence. The company and its U.S. partner Bristol-Myers Squibb Co. said advisers to the U.S. Food and Drug Administration supported marketing of their dapagliflozin treatment.
ARM Holdings advanced 3 percent to 1,001 pence after the smartphone-chip designer said it bought Geomerics Ltd. from Angle Plc. ARM didn’t disclose the price. Angle separately said it will get as much as 6.2 million pounds ($10.1 million) from the sale of the graphics-technology developer.
Hays Plc climbed 2.1 percent to 118.8 pence, its biggest rally in five weeks. Morgan Stanley started coverage of the recruitment company with an overweight rating, similar to buy. The brokerage predicted that increasing demand for temporary workers in its main markets will boost profit next year.
Home Retail Group Plc gained 2.2 percent to 189.7 pence. Deutsche Bank AG upgraded the owner of the Argos and Homebase chains to buy from hold. The brokerage also named the retailer as one of its top picks, saying non-food retail demand is rising.
RSA Insurance dropped 7.2 percent to 92.5 pence. The insurer will inject 130 million pounds into its Irish reserves, according to a statement. As a result, RSA projected a “mid-single-digit” return on equity for this year. It said last month that the measure of profitability would drop below 10 percent.
Societe Generale SA said the addition in RSA’s reserves was higher than expected and that it is concerned about the company’s governance.
Aggreko Plc slipped 2.2 percent to 1,516 pence. Numis Securities Ltd. cut its rating on the stock to sell from reduce, saying a lack of new contracts and a stronger pound will weigh on sales next year.