U.K. Stocks Decline to Six-Week Low as BHP, HSBC RetreatNamitha Jagadeesh
U.K. stocks fell to the lowest level in more than six weeks amid speculation minutes from last month’s Federal Open Market Committee meeting will signal when the U.S. central bank could start tapering stimulus measures.
BHP Billiton Ltd., the world’s biggest mining company, and Fresnillo Plc, a producer of gold and silver, slid more than 1.5 percent as metal prices dropped. HSBC Holdings Plc led a decline in U.K. banks. Aberdeen Asset Management Plc fell 5.9 percent, following European financial-services companies lower.
The FTSE 100 Index slipped 62.62 points, or 1 percent, to 6,390.84 at the close in London, its lowest level since July 5. The gauge has fallen 6.6 percent from a high on May 22 after Fed Chairman Ben S. Bernanke said the central bank may reduce its monthly bond purchases if the economy strengthens in line with forecasts. The broader FTSE All-Share Index retreated 0.8 percent today, while Ireland’s ISEQ Index advanced 0.2 percent.
“We’re seeing a selloff in markets because there is still nervousness that Fed tapering may start next month,” said Jacques Porta, who helps oversee about $780 million as a fund manager at Ofi Gestion Privee in Paris. “Investors are waiting to see what officials said at the last FOMC meeting. It’s possible we will have more information this week about the timing of the exit. If not, markets are going to stay nervous.”
HSBC, British American Tobacco Plc and six other companies traded without the right to their latest dividends today, shaving off 10.6 points from the FTSE 100. The volume of shares changing hands in companies listed on the equity benchmark was 12 percent lower than the 30-day average, data compiled by Bloomberg show.
The Fed will publish minutes from the FOMC’s July 30-31 meeting at 2 p.m. in Washington today. Investors will scrutinize policy makers’ deliberations for evidence of when the Fed will start paring its $85 billion in monthly bond purchases. The FOMC holds its next meeting on Sept. 17-18.
The U.S. central bank will start to scale back bond buying next month, according to 65 percent of economists surveyed by Bloomberg from Aug. 9-13. The median estimate called for purchases to drop to $75 billion a month.
Central bankers and policy makers will meet in Jackson Hole, Wyoming on Aug. 22-24 to discuss the global economy and monetary policy. Speakers include International Monetary Fund Managing Director Christine Lagarde and Bank of Japan Governor Haruhiko Kuroda. Bernanke, who has given the keynote speech at the annual symposium every year since becoming Fed chairman in 2006, does not plan to attend the conference.
A gauge of mining companies in the FTSE 350 Index declined for a third day as copper and gold prices fell. BHP lost 2.6 percent to 1,873 pence and Fresnillo dropped 1.7 percent to 1,164 pence. Rio Tinto Group, the second-biggest commodity producer, retreated 2.1 percent to 2,987 pence.
HSBC, Europe’s largest lender, slid 2.3 percent to 682 pence. Barclays Plc lost 1.3 percent to 283 pence and Royal Bank of Scotland Group Plc dropped 1.3 percent to 334.1 pence.
Aberdeen slipped 5.9 percent to 356.3 pence and Schroders Plc declined 2 percent to 2,334 pence. Banks and financial-services firms were the worst performers of the 19 industry groups on the Stoxx Europe 600 Index.
BP Plc, Europe’s second-largest oil company, retreated 1.1 percent to 432.55 pence as crude declined to a one-week low.