By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. equities slipped Tuesday, with
market heavweight Vodafone Group PLC falling following a warning
that its credit rating may be cut, but an advance in grocery chain
J Sainsbury PLC helped limit the FTSE 100's losses.
The FTSE 100 Index shed 0.3% to 6,549.28, taking back a portion
of Monday's 0.6% gain that marked the index's first winning session
in six days.
Shares of Vodafone Group PLC stepped back 0.9% after Fitch
Ratings said it may downgrade the wireless firm's rating by one
notch if it purchases Spanish cable firm Ono SA without taking
other measures to reduce debt.
Vodafone's leverage is low for a 'A-' rating, said Fitch, with
funds from operations adjusted net leverage expected to be 1.2
times at the end of March. But the planned deal with Ono, and
Vodafone's Project Spring investment program over the next few
years, "could push this metric to above 2.5x within 18 months,
which is the upper end of the leverage range for a 'A-'
rating."
Vodafone shares climbed 1.7% on Monday following news of the
planned acquisition.
Among other stocks, J Sainsbury PLC came off intraday lows to
turn 0.7% higher, with the company able to hold on to its 17%
market share at the same time that quarterly sales declined. In the
10 weeks to March 15, Sainsbury posted a 1.5% fall in total sales,
and excluding fuel, total sales were down 1% during the period.
Sainsbury's figures follow last week's below-anticipated
projection from Wm. Morrison Supermarkets PLC that underlying
profit for the fiscal year 2014-2015 will drop between 460 million
pounds ($764 million) and GBP510 million. Morrisons shares on
Tuesday were down 1%. At the same time, shares of Tesco PLC edged
up 0.2%.
Off the FTSE 100 Index, stock in Asos PLC slid 20% as the online
fashion company's raised capital expenditure plans will likely
pressure its yearly earnings.
Elsewhere in London, the Bank of England named three new senior
officials to join the central bank. Among them is Ben Broadbent,
who will become deputy governor of monetary policy.
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