U.K. Stocks Fall as M&S, Vodafone Decline After EarningsJonathan Morgan
U.K. stocks retreated for a second day, with the benchmark FTSE 100 Index falling the most in more than a month, as investors weighed corporate earnings from Marks & Spencer Group Plc to Vodafone Group Plc.
Marks & Spencer lost 1.1 percent after reporting a drop in annual pretax profit. Vodafone fell to its lowest price since February 2013 after posting a decrease in quarterly service revenue and forecasting a decline in earnings this year of as much as 11 percent. Carnival Plc rose the most since December as Morgan Stanley upgraded the shares.
The FTSE 100 dropped 42.55 points, or 0.6 percent, to 6,802 at the close of trading in London. The U.K. equity benchmark gauge rose to a 14-year high on May 14 and climbed 0.6 percent last week. The FTSE All-Share Index dropped 0.5 percent today, and Ireland’s ISEQ Index slipped 0.2 percent.
“Investors are currently unwilling to commit,” said Richard Hunter, head of equities at Hargreaves Lansdown Plc in London. “On the corporate front, M&S has delivered another set of fairly uninspiring numbers even though some progress is being made, while the forward guidance on lower earnings from Vodafone has been met with some disappointment by investors.”
M&S retreated 1.1 percent to 446 pence. Underlying pretax profit fell 3.9 percent to 623 million pounds ($1 billion) in the year ended March 29, for its third straight annual decline. Britain’s largest clothing retailer also said the introduction of a new customer website may affect its first-quarter performance as shoppers take time to become accustomed to it.
Vodafone dropped 5.5 percent to 205.3 pence. Earnings before interest, taxes, depreciation and amortization in the year ending March 2015 will fall to a range of 11.4 billion pounds to 11.9 billion pounds, the mobile-phone company said.
Vodafone today posted its seventh straight quarter of service revenue declines amid price wars in its biggest markets. It also said it wrote down 6.6 billion pounds on the value of its businesses in its biggest market Germany, as well as Spain, Portugal, the Czech Republic and Romania last year.
Tesco Plc dropped 1.9 percent to 306.1 pence. Jefferies Group LLC cut its rating on the U.K.’s biggest grocer to hold from buy. Wm Morrison Supermarkets Plc, the smallest of the U.K.’s four main supermarket chains, fell 2.1 percent to 209.5 pence.
HSBC Holdings Plc slipped 0.9 percent to 627.1 pence. The European Union’s antitrust arm today accused the U.K. lender, along with JPMorgan Chase & Co. and Credit Agricole SA, of colluding to manipulate interbank lending rates. The trio got antitrust complaints alleging they took part in a cartel to rig Euribor. The so-called statement of objections is the next step in the EU enforcement process after the lenders dropped out of settlement talks last year. HSBC said in a statement that it would defend itself against the allegations.
Carnival added 3.4 percent to 2,380 pence. Morgan Stanley upgraded the shares to equal weight -- similar to a hold rating -- from underweight, citing strong bookings. The brokerage also said the company’s yield forecasts may be overly pessimistic, while pricing for the Caribbean market has likely bottomed. Separately, the cruise ship operator said it will add two ships to the fleet of its P&O Cruises Australia operation in 2015.
ITV Plc advanced 2.2 percent to 176.6 pence. Berenberg Bank upgraded its recommendation on the U.K.’s biggest commercial broadcaster to hold from sell, citing its acquisition of a controlling stake in Leftfield Entertainment Group, and recent declines in the share price. The stock has fallen 9 percent so far this year.