U.K. stocks declined as weaker metal prices and a stronger U.S. dollar dragged raw-material companies lower and Simon Property Group Inc. said it may withdraw its bid for Capital Shopping Centres Group Plc.
Fresnillo and Randgold Resources Ltd. both lost more than 3 percent. Capital Shopping retreated 5.3 percent after Simon said it will withdraw its bid if Capital Shopping refuses to provide the financial information needed to evaluate the company.
The benchmark FTSE 100 Index declined 0.2 percent to 5,794.53 at the 4:30 p.m. close in London. The gauge has rallied 7.1 percent this year as corporate profits improved, the Federal Reserve announced a $600 billion bond-purchase program to stimulate the U.S. economy and the European Union bailed out the Greek and Irish economies. The FTSE All-Share Index slid 0.3 percent today, while Ireland’s ISEQ Index advanced 1 percent.
“It has been a choppy trading session today with a lack of any significant economic data giving the market no drivers,” Giles Watts, head of equities at City Index Ltd. in London, said. The stronger dollar is “pressurizing commodity prices, forcing heavyweight mining and energy stocks lower.”
Fresnillo declined 4.9 percent to 1,527 pence and Randgold Resources dropped 3.5 percent to 5,700 pence. Kazakhmys Plc lost 2 percent to 1,523 pence. Silver, nickel and zinc prices retreated.
Capital Shopping Tumbles
Capital Shopping declined 5.3 percent to 386.2 pence, its largest drop in six weeks.
“By declining to provide us with the requested limited due-diligence information, you have constrained the exploration of an opportunity to benefit your shareholders,” Simon said in a letter to Capital Shopping included in a statement today.
Smith & Nephew Plc gained 9.1 percent to 662 pence. The Daily Mail reported that a U.S. group of private equity companies may make a 800 pence bid for the shoulder and knee implant maker. The Daily Mail didn’t say where it got the information.
Smith & Nephew’s external spokesman Jon Coles said the company doesn’t comment on market rumors.
Burberry Group Plc, the U.K.’s largest luxury retailer, rallied 2.3 percent to 1,156 pence as investors speculated that PPR SA, the French owner of the Gucci and Puma brands, may make bid for the company.
“There have been reports that PPR was close to an agreement with Steinhoff to sell Conforama,” Peter Farren, an analyst at Bryan Garnier & Co., said. “That would fuel speculation on Burberry.”
M&A Deals
“M&A and buyback activity will increase significantly over the next 12 months,” Andrew Garthwaite, the head of global equity strategy at Credit Suisse Group AG, wrote in a report today. “We think that the corporate sector could end up being the major buyer of equities.”
Credit Suisse reduced its stance on U.K. stocks to “benchmark” from “overweight,” saying the pound’s strength may limit equities’ gains.
Prudential Plc climbed 3.7 percent to 634.5 pence as UBS AG added Britain’s largest insurer to its European “key calls” list and Standard & Poor’s raised its outlook for the U.S. life insurance industry to “stable.”
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