U.K. stocks fell, following a five-day rally that pushed the FTSE 100 Index to its biggest weekly gain since February, as Barclays Plc posted earnings that missed estimates, while tension escalated in Ukraine.
Barclays slipped 5.2 percent as first-quarter profit fell and revenue from trading bonds, currencies and commodities declined. Balfour Beatty Plc plunged the most since 1998 after its chief executive officer quit and the construction company cut its profit forecast for 2014. Just Eat Plc rose 4.6 percent after reporting a 51 percent increase in quarterly orders.
The FTSE 100 retreated 23.86 points, or 0.4 percent, to 6,798.56 at the close of trading in London. The benchmark gained for a third straight week last week amid a flurry of mergers-and-acquisitions announcements. The U.K. market was closed yesterday for a holiday. The FTSE All-Share Index lost 0.3 percent today, while Ireland’s ISEQ Index fell 0.6 percent.
“Earnings in Europe have generally been weaker than in the U.S.,” said Peter Garnry, head of equity strategy at Saxo Bank A/S in Hellerup, Denmark. “Ukraine is a cause for worry, but the situation has still not impacted our macro forecasts. The only scenario where Europe would go into recession is if Russia pulls the energy card because Europe’s industry cannot afford higher energy prices.”
Fighting in Ukraine yesterday killed four government soldiers and about 30 separatists, acting Interior Minister Arsen Avakov said on his Facebook account. Rebels seized more than 30 administration buildings, police stations, security-services offices and other installations in the eastern regions of Donetsk and Luhansk, the Interior Ministry said.
German Chancellor Angela Merkel and U.S. President Barack Obama have set the May 25 presidential election in Ukraine as the trigger for further economic sanctions against Russia if it fails to withdraw its support for the separatists.
Barclays dropped 5.2 percent to 245 pence, its biggest decline since July. Pretax profit, excluding swings in the valuation of the lender’s debt, fell 5.2 percent to 1.69 billion pounds ($2.9 billion), missing the 1.82 billion-pound estimate of analysts provided by the bank. Income from fixed income, currencies and commodities declined 41 percent to 1.2 billion pounds, Barclays said in a statement today.
Balfour Beatty sank 20 percent to 228.6 pence. The company predicted pretax profit will only reach 145 million pounds to 160 million pounds this year because of slower-than-estimated improvements at its U.K. construction unit. That compared with 187 million pounds in 2013. Balfour Beatty had expected to make some progress as recently as March. Andrew McNaughton stepped down after 13 months as CEO, the company also said.
Aberdeen Asset Management Plc retreated 2.4 percent to 435.4 pence, taking its losses this year to 13 percent. Six-month pretax profit fell 3 percent to 217 million pounds and investors withdrew a net 8.8 billion pounds in the period because of negative sentiment toward emerging markets, the fund manager said in a statement.
AstraZeneca Plc dropped 2.7 percent to 4,677.5 pence. The drugmaker, which last week rejected a 50-pound-a-share offer from Pfizer Inc., predicted it will have more than $45 billion in annual revenue by 2023.
Just Eat jumped 4.6 percent to 230 pence. The online food-delivery company said orders rose 51 percent during the first three months of 2014 from a year earlier, in part because of the unusually wet weather in the U.K. and northern Europe.
Pearson Plc advanced 1.7 percent to 1,112 pence. A consortium led by the education company won a contract to help develop English and mathematics tests for U.S. students, according to a May 2 statement from PARCC, a nonprofit academic assessment group of 17 states.
J Sainsbury Plc, which reports full-year earnings tomorrow, added 3.8 percent to 333.4 pence. Wm Morrison Supermarkets Plc, which releases first-quarter sales on Thursday, climbed 3 percent to 202 pence.