U.K. Stocks Decline as Tate & Lyle, Rolls-Royce TumbleInyoung Hwang
U.K. stocks fell for the first time in seven days as Tate & Lyle Plc and Rolls-Royce Holdings Plc published disappointing forecasts, while data showed U.S. retail sales declined in January and jobless-benefit claims increased.
Tate & Lyle tumbled the most in more than six years after the maker of Splenda sweetener predicted that sucralose prices will fall in 2015. Rolls-Royce sank the most since August 2000 after saying revenue won’t grow this year for the first time in a decade. Imperial Tobacco Group Plc gained 5.7 percent after reiterating its full-year earnings and dividend targets.
The FTSE 100 Index lost 15.61 points, or 0.2 percent, to 6,659.42 at the close in London, after earlier falling as much as 1 percent. The benchmark gauge rallied 3.5 percent in the six days through yesterday, as comments by Federal Reserve Chair Janet Yellen fueled optimism the U.S. economy can withstand reduced monthly bond purchases. The broader FTSE All-Share Index also declined 0.2 percent today, while Ireland’s ISEQ Index retreated 0.2 percent.
“Investors are watching earnings very closely, more so this time than in previous quarters because we’ve had several quarters of expansion,” David Wartenweiler, chief investment officer at Habib Bank AG, said by telephone from Zurich. “Now the question is: Can we maintain the momentum?”
The number of shares changing hands in FTSE 100-listed companies was 55 percent higher than the 30-day average, according to data compiled by Bloomberg.
In the U.S., a Commerce Department report showed retail sales fell 0.4 percent in January after a revised 0.1 percent drop the prior month. The median forecast of 86 economists surveyed by Bloomberg called for no change.
Jobless claims in the world’s largest economy increased by 8,000 to 339,000 in the week ended Feb. 8 from 331,000 in the prior period, according to data from the Labor Department. The median forecast of 52 economists surveyed by Bloomberg called for a decrease to 330,000.
Tate & Lyle plunged 16 percent to 660 pence. The sugar producer predicted sucralose prices will fall 15 percent in its next financial year, which starts in April. The company said that a significant supply of unsold Chinese sucralose had made the market for the sweetener more competitive.
Tate & Lyle also estimated its full-year profit will now be similar to the previous 12 months. It had forecast in November “another year of profit growth.”
Rolls-Royce tumbled 14 percent to 1,045 pence. “We expect a pause in our revenue and profit growth, reflecting offsetting trends across the business,” Chief Executive Officer John Rishton said.
The London-based maker of aircraft engines reported pretax profit excluding hedging and some one-time items advanced to 1.76 billion pounds ($2.9 billion) last year, while sales rose 27 percent to 15.5 billion pounds.
Lloyds Banking Group Plc fell 2.7 percent to 81.32 pence. Britain’s biggest mortgage lender posted a net loss of 838 million pounds for 2013, compared with 1.47 billion pounds in 2012. That still missed the 519 million-pound median estimate of seven analysts surveyed by Bloomberg.
Aberdeen Asset Management Plc slipped 4.5 percent to 408.2 pence. Scotland’s largest money manager was cut to underperform, the equivalent of a sell rating, from hold at Jefferies Group LLC, which said the acquisition of Scottish Widows Investment Partnership won’t compensate for the slowdown in the company’s equity business. Jefferies also slashed its one-year price target by 19 percent to 350 pence.
Imperial Tobacco rose 5.7 percent to 2,351 pence, for its biggest advance in three years. The maker of Davidoff and Gauloises Blondes cigarettes said full-year earnings per share at constant exchange rates will show a modest increase, while the dividend will be raised at least 10 percent. Imperial also said underlying net tobacco revenue rose 1 percent in the first quarter to about 1.6 billion pounds.
Europe’s second-biggest tobacco company is considering an initial public offering of its European logistics unit this year, people familiar with the matter said. Imperial confirmed that it’s “reviewing its options” in relation to an IPO of the unit, adding in a statement that the outcome isn’t certain.
British American Tobacco Plc advanced 1.9 percent to 3,052 pence.
Amec Plc gained 1.1 percent to 1,080 pence. The second-biggest U.K. oil and gas engineer proposed increasing its dividend by 15 percent to 42 pence a share “as a mark of our continued confidence in the outlook and reflecting our strong cash generation.”
Asos Plc rose 4.5 percent to 6,562 pence. MSCI Inc. said it will add the U.K.’s largest Internet-only clothing retailer to its global gauge of developed shares after the close on Feb. 28.