U.K. Stocks Little Changed as China Trade Data Disappoint

U.K. stocks were little changed from a five-week high as a report showed Chinese exports and imports unexpectedly fell, while investors awaited minutes from the Federal Open Market Committee’s meeting last month.

Anglo American Plc and Rio Tinto Group slid as the data stoked concern about the scale of the slowdown in the world’s largest consumer of metals. G4S Plc lost 1.7 percent as Goldman Sachs Group Inc. advised selling the shares before the security-services company reports results. Burberry Group Plc jumped 4.8 percent after the luxury-goods retailer beat sales estimates.

The FTSE 100 Index lost 8.12 points, or 0.1 percent, to 6,504.96 at the close of trading in London. The gauge rallied 2.6 percent last week, and closed at the highest level since June 4 yesterday, as the Bank of England and the European Central Bank pledged to keep interest rates low for the foreseeable future. The FTSE All-Share Index fell 0.2 percent today and Ireland’s ISEQ Index lost 0.6 percent.

“The weak trade data pose further downside risks to the June and second-quarter growth numbers due for release on 15 July, and help reinforce our concern over risks” in the second half, Zhiwei Zhang and a team of metals analysts at Nomura Holdings Inc. wrote in a report to investors today.

Data from the General Administration of Customs in Beijing showed Chinese exports fell 3.1 percent from a year earlier, the most since the global financial crisis, compared with the median estimate of a 3.7 percent gain in a Bloomberg News survey. Imports dropped 0.7 percent, while the median projection was for a 6 percent increase.

Fed Minutes

In the U.S., the Federal Reserve releases the minutes of its June meeting at 2 p.m. in Washington. Speaking after that gathering, Chairman Ben S. Bernanke said the central bank may reduce the pace of its $85 billion in monthly bond buying later in 2013, and may halt purchases in mid-2014 if the U.S. economy performs as the Fed forecasts. His comments triggered a 3 percent selloff in the FTSE 100 on June 20.

“It is important to understand that the monetary and fiscal policies had a hugely beneficial impact on financial markets but significantly less obvious benefits to the real economy,” said Stewart Richardson, who helps oversee about $100 million as a fund manager at RMG Wealth Management LLP in London. “The second half of the year will be more difficult than the first few months were, and we suspect that tactical strategies will be required rather than a simple buy and hold approach.”

Anglo American fell 1.1 percent to 1,268 pence, while Rio Tinto retreated 1 percent to 2,709.5 pence. A gauge of commodity producers dropped the most of the 19 industry groups on the Stoxx Europe 600 Index.

G4S Declines

G4S dropped 1.7 percent to 225.6 pence. Goldman Sachs wrote in a report to investors that first-half results may disappoint, with margins for the second quarter narrowing from the previous period. The bank rated the shares a “conviction sell.” G4S will report its earnings on Aug. 28.

Burberry rose 4.8 percent to 1,509 pence. The U.K.’s largest luxury-goods maker reiterated its forecasts for the year after sales of its spring-summer collection lifted first-quarter retail revenue more than analysts estimated.

Retail revenue advanced 21 percent to 339 million pounds ($505 million) in the three months ended June 30, London-based Burberry said today. Analysts predicted 316 million pounds based on the median of nine estimates compiled by Bloomberg News. Same-store sales increased 13 percent, beating the 5 percent analysts had predicted.

Tesco Upgraded

Tesco Plc, the U.K.’s largest grocer, added 1.7 percent to 349.5 pence. William Morrison Supermarkets Plc rose 1.4 percent to 282 pence. Exane BNP upgraded its recommendation on Tesco to outperform, similar to buy, from neutral. The broker raised its rating on Morrison to neutral from underperform. Analysts cited Tesco’s move to improve its products and stores, and highlighted Morrison’s earnings and margins outlook, for the upgrades.

Halfords Group Plc jumped 11 percent to 354.5 pence, the steepest advance since October. The stock led gains in the All-Share index after the U.K.’s biggest seller of bicycles said like-for-like retail revenue grew 8.8 percent in the 13 weeks to June 28, boosted by sales of bikes and car-maintenance products.

Kate Calvert, an analyst at Cantor Fitzgerald in London, upgraded her recommendation on the shares to hold from sell. “While Halfords was up against weak comparables in the first quarter, this is a very strong underlying performance nevertheless, and we believe it also reflects management actions within the business,” she wrote.

The number of shares changing hands on FTSE 100-listed companies was 11 percent lower than the average of the past 30 days, data compiled by Bloomberg shows.

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