U.K. Stocks Retreat for a Second Day as Retailers FallSofia Horta e Costa and Trista Kelley
U.K.’s FTSE 100 Index fell to the lowest level since before Christmas as retailers slid and the Bank of England and the European Central Bank maintained their stimulus measures.
Wm Morrison Supermarkets Plc tumbled to a four 1/2-year low after saying annual profit will be at the lower end of analysts’ estimates. Tesco Plc fell 1.2 percent after the grocer’s holiday sales missed projections. Standard Chartered Plc slid 2.2 percent after announcing a management reorganization. CRH Plc and Tullow Oil Plc rose at least 2 percent after analysts advised investors to buy the shares.
The FTSE 100 slipped 30.44 points, or 0.5 percent, to 6,691.34, its lowest since Dec. 23. The benchmark, which posted the second-smallest rally last year among developed European markets tracked by Bloomberg, has dropped 1 percent in the last two days, the most since Dec. 13. The broader FTSE All-Share Index lost 0.4 percent today, while Ireland’s ISEQ Index rose 0.9 percent to extend its highest level since July 2008.
“Monetary policy in the euro zone remains too tight and more action is needed from the European Central Bank,” Georgios Tsapouris, an investment strategist at Coutts & Co. in London, wrote in emailed comments. His firm oversees about $50 billion. “The risk is that it may take a growth scare again before the ECB moves to loosen policy.”
The number of shares trading hands today in FTSE 100-listed stocks was 52 percent greater than the average of the past 30 days, data compiled by Bloomberg showed.
The ECB and the BOE maintained their benchmark interest rates at record lows of 0.25 percent and 0.5 percent, respectively, as projected by all economists in separate Bloomberg surveys. The U.K. central bank also left the stock of asset purchases at 375 billion pounds ($617 billion). ECB President Mario Draghi said policy makers strengthened their pledge to keep interest rates low for as long as necessary to support the euro-area economy.
Wm Morrison, which will report annual results on March 13, tumbled 7.8 percent to 234.5 pence. Full-year underlying operating profit will be near the lower-end of the 783 million-pound to 853 million-pound range estimated by analysts, Morrison said in a statement. Comparable holiday sales fell 5.6 percent, Morrison said.
Tesco Plc slipped 1.2 percent to 324.35 pence. U.K. same-store sales, excluding gasoline and value-added tax, fell 2.4 percent in the six weeks that ended Jan. 4. The median of 13 estimates in a Bloomberg survey was for a 2.2 percent drop.
Standard Chartered retreated 2.2 percent to 1,283.5 pence, its lowest price in 17 months. Chief Financial Officer Richard Meddings and Steve Bertamini, head of consumer banking, will step down from the bank’s board and leave the company by June 30, according to a statement. The lender named Mike Rees as deputy chief executive officer to run the corporate and consumer-banking units, which will be combined from April 1.
Marks & Spencer Plc gained 3.6 percent to 460.9 pence, for its highest price in almost a month. The retailer said its women’s-wear unit has gained market share in the 12 weeks through Nov. 24, for the first time in three years.
CRH Plc advanced 2.2 percent to 19.63 euros in Dublin, its highest price since June 2010. UBS AG upgraded the construction-materials maker to buy from neutral. A continued recovery in its U.S. business and improvement in Europe may help CRH post its first annual earnings growth in eight years, UBS analyst Gregor Kuglitsch wrote.
Tullow Oil gained 3.1 percent to 845 pence. Genel Energy Plc rose 3.5 percent to 1,117 pence, its highest price since it listed its shares in 2011. HSBC Holdings Plc upgraded both the oil-and-gas companies to overweight, a rating similar to buy, from neutral. The brokerage’s analyst Peter Hitchens said 2014 may bring drilling success and the current valuations of these stocks present a good entry point for investors.