U.K. stocks declined as investors weighed data that showed a manufacturing contraction in China and an increase in purchases of previously owned U.S. houses.
EasyJet Plc fell 4.1 percent after forecasting a wider first-half pretax loss. Pearson Plc tumbled the most in more than 13 years after saying it probably spent more on reorganization last year than projected. Marks & Spencer Group Plc rose 2.6 percent as Exane BNP Paribas advised investors to buy the shares.
The FTSE 100 Index lost 53.05 points, or 0.8 percent, to 6,773.28 at the close of trading in London. The gauge gained 1.1 percent since New Year through yesterday as the World Bank and the International Monetary Fund raised their forecasts for global growth. The broader FTSE All-Share Index slipped 0.8 percent today, while Ireland’s ISEQ Index retreated 1 percent.
“There’s a building concern as U.S. investors focus more on the China data,” Lorne Baring, who manages about $500 million as managing director of B Capital in Geneva, said in a telephone interview. “The Chinese question is back at the forefront as investors try to gauge if it is in fact maintaining stable growth.”
In China, manufacturing may contract for the first time in six months, according to a gauge published by HSBC Holdings Plc and Markit Economics. The preliminary reading of 49.6 for a purchasing managers’ index in January lagged all 19 estimates in a Bloomberg News survey. A reading above 50 indicates expansion. The final reading will be published on Jan. 30.
In the U.S., a release showed first-time jobless claims in the world’s largest economy increased to 326,000 last week from a revised 325,000 a week earlier. That number was lower than the 330,000 claims projected in a Bloomberg survey.
Purchases of previously owned homes climbed 1 percent to a 4.87 million annual pace, data from the National Association of Realtors in Washington showed. The median forecasts of economists in a Bloomberg survey called for a 0.6 percent increase and a 4.93 million rate. November figures were revised from 4.90 million to 4.82 million.
A preliminary report today showed that euro-area factory output is expanding in January by a faster pace than economists forecast. An index based on a survey of purchasing managers increased to 53.9 this month from 52.7 in December, Markit Economics said. That beat the median estimate in a Bloomberg survey. Markit will publish the final report on Feb. 3.
EasyJet declined 4.1 percent to 1,672 pence. Europe’s second-biggest discount airline said pretax loss in the six months through March 31 will be 70 million pounds ($116 million) to 90 million pounds, compared with a loss of 61 million pounds a year earlier. Last year’s sales included Easter-holiday revenue, while this year, the festival falls in its second half, the company said.
Pearson lost 8.2 percent to 1,191 pence, its biggest drop since July 2002, after posting higher restructuring costs. The owner of the Financial Times newspaper said it spent 170 million pounds ($282 million) on reorganization, overshooting its earlier prediction of 150 million pounds. As a result, savings from the exercise missed its forecast.
Separately, JPMorgan Chase & Co. said it expects analysts to lower their estimates for Pearson’s 2014 earnings.
Marks & Spencer advanced 2.6 percent to 493.2 pence after Exane raised the shares to outperform from underperform, meaning investors should buy the stock. The brokerage predicted the company’s profits will rise 40 percent in three years.