U.K.’s FTSE 100 Falls for Fifth Day; RBS Slumps, Capita Climbs
U.K. stocks declined for a fifth day as concern about the soaring price of oil in the wake of Libya’s violent uprising was offset by U.S. reports that showed a stronger recovery in the world’s largest economy.
Royal Bank of Scotland Group Plc sank 3.6 percent as Britain’s biggest government-owned bank posted a full-year loss that missed analyst estimates. Britvic (BVIC) Plc led declines on the FTSE 250 Index as the company said higher raw-material costs may stem an increase in profit. Capita Group Plc (CPI) climbed 7.2 percent, the most in more than three years.
The FTSE 100 retreated 3.35, or 0.1 percent, to 5,919.98 at the 4:30 p.m. close in London, capping the longest losing streak since July. Declines this week have almost erased this year’s advance amid speculation political instability in the Middle East will cause higher inflation, weakening the economic recovery and curbing earnings. The FTSE All-Share Index (ASX) slid 0.2 percent today, while Ireland’s ISEQ Index (ISEQ) dropped 0.5 percent.
“The situation in Libya shows no signs of abating,” said Will Hedden, a sales trader at IG Index in London. “Further oil price increases are likely to put a serious dent in the global economic recovery and could, in a worst case scenario, potentially kick-start double-dip recessions on both sides of the Atlantic.”
Oil soared to a two-year high as Libya’s uprising reduced supplies from Africa’s third-biggest producer.
Loyalists of Libyan leader Muammar Qaddafi sought to crush dissent in the capital, Tripoli, as his opponents tightened control of eastern cities. Libya’s civil unrest halted 500,000 barrels a day of oil production, creating “significant upside risk” by reducing OPEC’s ability to absorb further supply disruptions, according to Goldman Sachs Group Inc. Libya holds the biggest oil reserves in Africa.
Even so, the FTSE 100 trimmed a loss of as much as 1.1 percent as a report showed U.S. consumer confidence climbed last week to the highest level since April 2008 as Americans grew less pessimistic about their finances.
The Bloomberg Consumer Comfort Index, formerly the ABC News U.S. Weekly Consumer Comfort Index, was minus 39.2 in the period to Feb. 20, compared with minus 43.4 the prior week, a report today showed. Forty-nine percent of those polled held positive views on their financial situation, the most in a year.
Separate U.S. reports showed fewer Americans filed applications for unemployment insurance payments last week, while orders for durable goods climbed.
RBS (RBS) fell 3.6 percent to 45.60 pence. The net loss for 2010 was 1.1 billion pounds ($1.78 billion) compared with a loss of 3.6 billion pounds in 2009. That was worse than the 406.5 million-pound median loss estimated by 11 analysts surveyed by Bloomberg. Irish loan-losses almost doubled to 1.16 billion pounds, while operating profit at the investment bank fell by 2.2 billion pounds.
Britvic fell 12 percent to 369 pence, the biggest drop in almost five years. The maker of Robinson’s fruit drinks said prices of key raw materials are rising at an “unprecedented” pace and operating margins won’t improve this year.
Capita Group Plc, which provides a criminal records service for the U.K. Home Office, surged 7.2 percent to 718 pence. The company said it is bidding for and winning more orders than in 2010 as the economy recovers from recession.
To contact the reporter on this story: Adam Haigh in London at firstname.lastname@example.org