U.K. Stocks Fall; Cable & Wireless Communications Leads Decline
U.K. stocks declined for the fourth time in five days, with the FTSE 100 Index (UKX) extending its first weekly drop in a month, after euro-area finance ministers withheld a rescue package for Greece.
Cable & Wireless Communications Plc (CWC) sank 17 percent after cutting a forecast for its Panama unit. National Grid Plc retreated after JPMorgan Chase & Co. downgraded its recommendation on the utility. Anglo American Plc (AAL) led commodity producers lower as metals prices declined.
The benchmark FTSE 100 Index decreased 43.08, or 0.7 percent, to 5,852.39 at the close in London, for a 0.8 percent drop this week. The broader FTSE All-Share Index (ASX) also retreated 0.7 percent today, while Ireland’s ISEQ Index fell 0.5 percent.
“Trading all week had been dominated by the lack of a Greek deal,” Chris Beauchamp, a market analyst at IG Index in London, wrote in a note. “Heading into the weekend, we have another Greek deadline to contend with, which will be sufficient to keep investors on edge for the time being.”
Greek unions held their second strike in a week against proposed austerity measures as Finance Minister Evangelos Venizelos pressed lawmakers to accept conditions for a bailout, saying a refusal would open the way for the country’s exit from the euro. The Greek parliament will vote on the measures this weekend. Euro-region ministers will meet again on Feb. 15.
A leader of Greece’s governing coalition pushed back against German demands for deeper budget cuts. George Karatzaferis, who heads one of the three parties supporting interim Prime Minister Lucas Papademos, said he wouldn’t support austerity measures worked out for a rescue. He spoke hours after German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece was missing deficit targets.
Cable & Wireless Communications sank 17 percent to 36.33 pence, the biggest drop since 2002. The company said full-year earnings before interest, taxes, depreciation, and amortization at its Panama unit will be less than its own projection. The business has been affected by the high level of competition in mobile-phone services, the company said.
National Grid (NG/) dropped 1.2 percent to 632.5 pence after its stock was cut to “neutral” from “overweight” at JPMorgan.
Anglo American fell 4 percent to 2,746.5 pence, pacing declines in mining shares. Rio Tinto Group lost 1.1 percent to 3,772 pence and Kazakhmys Plc (KAZ) declined 4.5 percent to 1,124 pence. Copper, lead, nickel and tin declined in London.
Vernalis Plc (VER) jumped 29 percent to 25.25 pence, for its biggest gain since July 2004, after entering a pact with closely-held Tris Pharma Inc. to develop cough and cold drugs in a market the unprofitable U.K. drugmaker valued at as much as $2 billion. The deal is likely to push Winnersh, England-based Vernalis into profitability this year, Chief Executive Officer Ian Garland said in an interview.
Phoenix Group Holdings (PGH) slipped 1.5 percent to 561 pence. The U.K.’s biggest manager of closed life insurance funds declined after saying it ended takeover talks with private equity firm CVC Capital Partners Ltd.
McBride Plc (MCB), a maker of household cleaning products, added 2 percent to 127.25 pence. The stock was raised to “hold” from “sell” at Shore Capital.
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