By Barbara Kollmeyer, MarketWatch
Greek headlines captivate investor attention
MADRID (MarketWatch) -- Stocks fell in London on Wednesday, with
mining and oil issues leading the way, though ARM Holdings PLC
provided a bright spot.
Investors are also waiting for news on Greece's push to
restructure its debt, with eurozone finance ministers set to hold
an emergency meeting in Brussels later. The FTSE 100 fell 0.4% to
6,800.54. The index dropped 0.1% on Tuesday.
Shares of Tullow Oil took a hard fall, sinking 6% after the
Africa-focused oil explorer said Wednesday it swung to a loss for
2014 and would suspend its dividend. "2014 was a difficult year for
our industry and a challenging one for Tullow, as our results today
demonstrate," Chief Executive Aidan Heavey said in a statement.
As happened Tuesday, other names in the commodity space were on
the decline. Heavyweight BG Group PLC dropped 2%, and Royal Dutch
Shell PLC (RDSB) (RDSA) fell 1%.
Stocks of mining companies Anglo American PLC and BHP Billiton
PLC were off near 3% and 2%, respectively.
Broadcaster Sky PLC slid 2.5%. On Tuesday, the company said it
would retain Premier League soccer TV rights, but analysts were
fretting about the very high price the company is paying -- up 70%
a game, well above consensus estimates on what they would pay.
"While Sky says it can absorb extra cost to keep consensus
unchanged, this takes away future investment/wiggle room and
highlights unrelenting content-cost pressure," said analysts at
Investec Securities Research, who rate the company "reduce", and
said they are reviewing their forecasts and target prices.
BT Group PLC , meanwhile, was up 2.7%. It won slightly more
games in the Premier League auction, but will pay much less than
Sky, said Investec analysts.
A bright spot in London was ARM Holdings (ARMHY), surging 2.4%
after the British microchip designer, who counts Apple Inc. (AAPL)
as one of its customers, said it swung to a net profit in the
fourth quarter on strong royalty revenue and projected revenue
gains for the first quarter. ARM is also lifting its dividend to
4.5 pence (6.9 cents), pushing up its full 2014 dividend by 23% to
7 pence.
Shares of Reckitt Benckiser Group PLC jumped 3% as the
consumer-goods company announced a new cost-cutting plan and lifted
its share-buyback program as it reported a rise in full-year
earnings.
The Greek government's bailout program will be discussed at
Wednesday's emergency meeting of Eurogroup finance ministers. On
Tuesday evening, Greece's government won a confidence vote on its
plans in parliament.
On Thursday, investors in London will be on the lookout for the
Bank of England to slash its inflation forecasts to near zero
levels and state the likelihood of inflation falling into negative
territory, said analysts at FXStreet on their website. "Moreover,
the bank is likely to avoid sounding hawkish at a time when most
other central bankers across Europe are reducing interest rates to
record lows," said the analysts.
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