By Carla Mozee, MarketWatch
Sainsbury shares turn lower
LONDON (MarketWatch) -- U.K. stocks rose Tuesday, with gains for
the benchmark FTSE 100 coming in ahead of key policy announcements
from the U.K. and the U.S.
The FTSE 100 rose 0.5% to 6,837.61, as shares of
natural-resources producers ticked up and utilities pushed higher,
led by a 5% surge in shares of British Gas parent Centrica PLC .
The FTSE's move added to Monday's jump of 0.9% for the blue-chip
index.
(http://www.marketwatch.com/story/ftse-100-gains-but-crh-shares-drop-in-london-trade-2015-03-16)
Stocks traded in London managed to outperform equities in the
broader European market which fell following Monday's rally
(http://www.marketwatch.com/story/european-stocks-take-a-step-back-from-rally-mode-2015-03-17),
as well as U.S. stocks (SPX), which dropped as the Federal Reserve
began its policy meeting
(http://www.marketwatch.com/story/us-stocks-futures-dip-as-pre-fomc-jitters-start-to-seep-in-2015-03-17).
The Fed will announce its policy decision on Wednesday, and there
is concern the central bank will indicate it'll begin raising
interest rates this summer.
Also on Wednesday, U.K. financial chief George Osborne will
present the government's 2015 budget before lawmakers, marking the
final budget ahead of the U.K. general election that will be held
in May. The budget presentation is slated to begin at 12:30 p.m.
London Time
(http://www.parliament.uk/business/news/2015/march/budget-2015-statement/),
or 8:30 a.m. Eastern Time.
Banking stocks will be in focus as investors wait to hear if the
government plans to raise the rate of an annual bank levy that was
aimed at raking in GBP2.5 billion ($3.68 billion). "With bank
balance sheets continuing to shrink the rate of the levy will have
to increase for the government to raise a similar amount to
previous years. As a result there is unlikely to be many investors
looking to buy bank stocks tomorrow," said Angus Campbell, senior
analyst at FxPro, in a note.
Bank shares were mixed Tuesday. Barclays PLC lost 0.7% and Royal
Bank of Scotland PLC shed 0.2%. HSBC PLC gained 1.5% and Lloyds
Banking Group PLC picked up 0.1%.
Sainsbury and resources: Sainsbury's shares switched into the
red, losing 0.8%. The shares had risen earlier in the session after
the company's 1.7% decline in fourth-quarter same-store sales
excluding fuel was less than an expected fall of 2%. Total sales
excluding fuel fell 0.3% during the period. Sainsbury's said it is
seen growth in like-for-like transactions following price
reductions and simplified promotion.
Shares of rival supermarket chain Tesco PLC fell 1.7%, and Wm
Morrison Supermarkets PLC dropped 2.2%.
Sainsbury's fourth-quarter trading statement represented a
"slight beat against consensus" however of greater relevance is the
longer-term dynamic showing like-for-like sales still trending
down, said HSBC in a report Tuesday. Sainsbury is "vulnerable to a
resurgent Tesco and faces food deflation [and] cost inflation,"
wrote analyst David McCarthy.
Meanwhile, shares of Antofagasta were solidly lower, losing 2.8%
after the copper miner's yearly net profit fell to $459.8 million
(http://www.marketwatch.com/story/antofagasta-net-profit-falls-30-2015-03-17)
from $660 million a year ago, missing expectations of $676 million,
according to a FactSet poll of analysts. The company did reaffirm
plans to produce 710,000 tons of copper in 2015.
But shares of other mining and energy companies finished higher
following recent declines for the sector. Precious metal producer
Fresnillo PLC rose 1.6%, and diversified mining heavyweight BHP
Billiton PLC (BHP) climbed 3.3%. BHP on Tuesday outlined plans to
spin off a new company, South32
(http://www.marketwatch.com/story/bhp-outlines-plan-to-spin-off-south32-2015-03-16-18103017).
Tullow Oil PLC shares bounced up 6.1%, leading FTSE 100
advancers and outperforming a drop in Brent crude and U.S. oil
prices (CLJ5).
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