U.K. Stocks Fall for Fourth Day; Standard Chartered DropsJonathan Morgan
U.K. stocks dropped for a fourth day, the longest losing streak in two months, after a U.S. report showed companies accelerated hiring, increasing speculation that the Federal Reserve will start reducing stimulus.
Standard Chartered Plc retreated 6.5 percent after it said full-year operating profit at its consumer-banking unit will drop at least 10 percent. Aberdeen Asset Management Plc lost 2.5 percent after its chief executive officer sold shares. Sage Group Plc jumped 7.3 percent after the software maker said it would achieve 6 percent revenue growth in 2015.
The FTSE 100 Index slipped 23 points, or 0.3 percent, to 6,509.97 at the close of trading in London. That was its lowest level since Oct. 14. The gauge has rallied 10 percent this year as central banks around the world pledged to keep interest rates low for a prolonged period to support the economic recovery. The FTSE All-Share Index lost 0.3 percent today and Ireland’s ISEQ Index retreated 0.5 percent.
“As U.S. economic indicators continue to improve, the market is slowly bracing itself for the inevitable tapering of quantitative easing in the New Year,” said Richard Hunter, head of equities at Hargreaves Lansdown Plc in London.
A report showed U.S. companies added 215,000 workers in November, exceeding all estimates in a Bloomberg survey. On Friday, investors will get the latest reading on U.S. non-farm payrolls for last month, and data may show the unemployment rate fell to 7.2 percent.
U.K. stocks pared losses of as much as 0.8 percent after a report showed that purchases of new U.S. homes surged in October by the most in three decades. Sales jumped 25.4 percent to a 444,000 annualized pace, following a 354,000 rate in the prior month that was the weakest since April 2012, according to the Commerce Department.
Another report showed the Institute for Supply Management’s non-manufacturing index decreased to 53.9 in November from 55.4 in the prior month, a report from the Tempe, Arizona-based group showed today. A gauge above 50 shows expansion.
The Fed has said it will start paring its $85 billion of monthly bond purchases if the economy improves in line with its forecasts. The central bank will release its Beige Book report on economic conditions in its 12 districts after European markets close today.
In the euro area, gross domestic product rose 0.1 percent in the third quarter after a 0.3 percent gain in the previous three months, the European Union’s statistics office said today. Another report showed U.K. services growth slowed in November from the fastest growth in 16 years.
Standard Chartered retreated 6.5 percent to 1,338.5 pence after the U.K. lender that makes about three-quarters of its earnings in Asia said consumer-banking profit will fall in 2013.
Operating profit at the division “is now expected to be down by a double-digit rate,” while revenue is seen increasing “at a low single digit rate” in 2013, the London-based bank said in a statement today, without giving details. Consumer banking in Korea is expected to drop by about 15 percent.
Aberdeen lost 2.5 percent to 461.4 pence. The money manager’s chief executive officer sold about 1.68 million shares on Dec. 2, according to a statement.
Sage jumped 7.3 percent to 372.9 pence after reporting statutory revenue of 1.38 billion pounds ($2.26 billion) for the year, meeting analysts’ estimates, and organic growth of 4 percent. The software maker said it forecast that revenue excluding acquisitions will grow 6 percent in 2015.