By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks fell Tuesday, with investors
swatting down shares of banking heavyweight Barclays PLC and miner
Glencore PLC, pulling the benchmark FTSE 100 away from a record
high.
The FTSE 100 dropped 0.7% to 6,889.13 as all major sectors ended
lower. The fall in U.K. equities mirrored a drive lower on other
European and U.S. indexes
(http://www.marketwatch.com/story/nasdaq-drops-back-below-5000-as-us-stocks-slip-2015-03-03)(SPX)(RIXF)
that have recently hit record highs. The British benchmark last
week closed at its strongest level in more than 15 years.
Barclays shares posted one of Tuesday's worst performances, with
a 3.2% pullback marking their biggest decline in nearly two months.
The firm said fines and legal costs pushed it to a net loss of 174
million pounds
(http://www.marketwatch.com/story/barclays-posts-net-loss-on-fines-legal-costs-2015-03-03)
($267.4 million) for the year, as it set aside an extra GBP750
million in provision for an investigation into foreign-exchange
markets.
"The bank may be at its strongest 'since the financial crisis,'
but the fines and provisions have detracted from the company's
balance sheet," David Madden, market analyst at IG, wrote in a
note. "Barclays' capital structure isn't under question, and as
long as legal costs loom over the bank the share price will remain
restricted."
Elsewhere in the banking group, shares of Royal Bank of Scotland
PLC fell 2.2% and Lloyds PLC shed 0.7%. Standard Chartered PLC gave
up 0.6% and HSBC PLC (HSBC) turned lower, ending down 0.3%.
Also hurt was Glencore PLC , with shares falling 3.1% although
miner swung to a net profit of $2.31 billion for 2014
(http://www.marketwatch.com/story/glencore-returns-to-profit-despite-commodity-slump-2015-03-03)
and proposed a dividend increase of 9%
(http://www.marketwatch.com/story/glencore-raises-dividend-as-trading-profit-gains-2015-03-03).
Glencore shares had gained nearly 25% since mid-January,
reflecting a relatively positive investment case for the company
that included its "free cash flow profile, improving balance sheet,
commodity exposure, and resilient marketing business," said
analysts at Jefferies in a note. Profit-taking in the near-term
wouldn't be surprising as the shares had traded around 30 times
spot price-earnings ratio, the analysts said, adding that near-term
weakness would be an opportunity to buy at a more attractive
level.
The FTSE 100 had opened higher and held to gains after data firm
Markit said U.K. construction activity in February logged the
biggest pace of expansion in four months, driven by strength in new
orders. The Markit/CIPS construction purchasing managers' index
rose to 60.1 from 59.1 in January.
"Housing, commercial and civil engineering activity all expanded
at the quickest rates since last October, helped by sharp rises in
new business volumes and an improving economic backdrop," said Tim
Moore, senior economist at Markit, in a statement. Moore did add
that some construction companies indicated uncertainty about the
outcome of the U.K. general election in May "could prove a
temporary bump in the road for new work, as some clients had sought
to delay spending decisions."
Home builder Taylor Wimpey told shareholders on Tuesday that
it's in a solid position for 2015 with an order book of 1.66
billion pounds ($2.55 billion). Shares rose 2.1%, the second-best
advancers of the day, as the company also posted a 53% climb in
full-year pretax profit
(http://www.marketwatch.com/story/taylor-wimpey-full-year-profit-jumps-53-2015-03-03).
Shares of Tullow Oil topped the FTSE 100 as they rose 2.1%.The
move restored a portion of a nearly 8% loss on Monday, when the
shares came under pressure on speculation the drop in the oil
producer's market capitalization will result in it exiting the FTSE
100.
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