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U.K. Stocks Decline for a Second Day as Tesco, ITV Drop

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Feb. 26 (Bloomberg) -- U.K. stocks declined for a second day as Tesco Plc dragged the FTSE 100 Index lower.

Tesco fell 2.7 percent after Oriel Securities Ltd. said Britain’s largest retailer failed to announce the measures needed to turn around a decline in its same-store sales at yesterday’s investor day. ITV Plc dropped 2.2 percent after the broadcaster’s advertising revenue disappointed some analysts. Weir Group Plc rose 7.1 percent after the supplier of pressure pumps reported operating profit that beat estimates.

The FTSE 100 retreated 31.35 points, or 0.5 percent, to 6,799.15 at the close in London. The benchmark has still gained 4.4 percent in February, putting it on course for the best month since July. The broader FTSE All-Share Index also lost 0.5 percent today, while Ireland’s ISEQ Index slid 0.8 percent.

“The lack of a positive catalyst has cast a shadow over the market,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “Tesco remains under pressure after its recent strategic update. Analysts are less concerned with the details of the strategy, such as pulling back on some of its U.K. investment, but rather are more interested in what will likely be a further delay in the company fully achieving its transformation.”

The Office for National Statistics confirmed that Britain’s gross domestic product expanded 0.7 percent in the final three months of 2013, matching its initial estimate. The U.K. economy grew at its fastest pace since 2007 last year.

House Sales

In the U.S., the Commerce Department reported that sales of new houses climbed 9.6 percent to a 468,000 annualized pace in January, the most in more than 5 1/2 years. That beat the median economist forecast of 400,000 in a Bloomberg survey.

Tesco slid 2.7 percent to 326 pence after Oriel downgraded the shares to hold from add. The brokerage said that yesterday’s announcement of 200 million pounds ($333 million) in price cuts would prove too small to prompt a recovery in sales.

ITV retreated 2.2 percent to 201.5 pence. Britain’s largest commercial terrestrial broadcaster forecast that net advertising revenue will climb 2 percent in the first quarter. Oriel said that fell short of its estimates.

Barclays Plc declined 1.8 percent to 253.2 pence. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said after the close of European trading yesterday that the U.S. bank’s trading revenue has fallen about 15 percent this year.

Weir Rallies

Weir Group rose 7.1 percent to 2,519 pence. The company reported full-year operating profit of 467 million pounds, exceeding the average analyst estimate of 462.4 million pounds. The board recommended a dividend increase of 11 percent to 33.2 pence per share.

AO World Plc surged 33 percent to 378 pence in the first day of trading following the online retailer’s initial public offering.

Heritage Oil Plc jumped 14 percent to 239 pence after saying that its joint venture in Nigeria has successfully concluded tax-rebate negotiations with the local authorities.

“Shoreline and Heritage are currently quantifying the impact and expect the benefit of this to be recognized in the 2013 year-end results,” Heritage said in a statement.

International Personal Finance Plc rallied 11 percent to 557.5 pence after the lender of small, high-cost, unsecured loans posted pretax profit of 130.5 million pounds for 2013, an increase from 90.3 million pounds in 2012.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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