U.K. Stocks Fall, Extending 2012 Low
extending their lowest level this year, as continued uncertainty about Greece’s future in the euro area prompted investors to sell bank shares.
Royal Bank of Scotland Group Plc (RBS) and Barclays Plc both slid at least 1.5 percent in London trading. Retailers Kesa Electricals Plc (KESA) and French Connection Group Plc (FCCN) tumbled at least 10 percent after saying their sales decreased. ICAP Plc paced advancing shares as analysts upgraded the company.
The benchmark FTSE 100 Index (UKX) lost 0.6 percent to 5,375.58 at 9:57 a.m. in London, sliding for a fourth day, its longest losing streak since November. The benchmark measure has declined 9.9 percent from its 2012 high on March 16. The FTSE All-Share Index slid 0.4 percent today, while Ireland’s ISEQ Index dropped 0.4 percent.
The FTSE 100 has tumbled 6.3 percent this month, helping to wipe more than $3 trillion from the value of global stock markets, amid mounting concern Greece will exit the euro.
The country this week failed to form a new government, forcing policy makers to call another election. Panagiotis Pikrammenos, the head of Greece’s Council of State, the highest administrative court, became head of the caretaker administration yesterday. The formal announcement of the election date, probably June 17, will be made after the new parliament is sworn in today and then dissolved.
The new vote follows inconclusive May 6 elections that propelled a political group opposed to the terms of Greece’s international bailout into second place.
Spain’s Debt Auction
At a Spanish debt auction today, demand for bonds due in January 2015 was 4.47 times the amount sold, compared with 2.41 at the last auction. The bid-to-cover for securities maturing in July 2015 was 3.01, compared with 2.88.
RBS led banks lower, falling 1.6 percent to 21.5 pence. Barclays Plc (BARC) slid 1.5 percent to 186.2 pence and LLoyds Banking Group Plc (LLOY) retreated 1.9 percent to 28.1 pence.
Lenders dropped in Europe as the European Central Bank said it will temporarily stop lending to some Greek banks to limit its risk. President Mario Draghi signaled the ECB won’t compromise on key principles to keep Greece in the euro area.
The central bank said yesterday it will push the responsibility for lending to some Greek financial institutions onto the country’s central bank until they have sufficiently boosted their capital.
Kesa Electricals tumbled 10 percent to 48.9 pence after revenue at stores open at least a year fell 5.9 percent in the period from Jan. 9 to April 30. The average estimate of five analysts was for a 5.3 percent decline.
The owner of the Darty electronics retailer predicted annual profit at the “mid-point” of investor expectations after sales worsened as it sold fewer televisions.
Rival Dixons Retail Plc (DXNS) lost 2.2 percent to 14.8 pence.
French Connection Tumbles
French Connection sank 21 percent to 31.3 pence after the clothing retailer said sales in the first three months of its financial year declined 9.5 percent and it was unlikely that full-year profit will meet market expectations.
Elsewhere, Aviva Plc (AV/) slid 1.6 percent to 276.3 pence after the U.K.’s second-biggest insurer by market value reported a 7 percent decline in first-quarter sales of life insurance and pensions to 6.52 billion pounds ($10.4 billion). That missed some analysts’ estimates.
Vedanta Resources Plc (VED) slipped 3.3 percent to 992 pence as the copper producer reported fiscal full-year profit that plunged 92 percent on higher financing costs, largely for the loan it arranged to acquire oil producer Cairn India Ltd.
ICAP (IAP) gained 3.2 percent to 347.3 pence as Numis Securities raised its recommendation for the world’s largest broker of transactions between banks to buy from hold. UBS AG also upgraded the shares to neutral from sell.
Concentrate, and ASK the 8-Ball!
