By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in London fell Monday, with
mining shares among those that lost ground as weaker-than-expected
data from China and Germany pressured equities across Europe.
The FTSE 100 Index lost 0.6% to 6,520.39, as copper producer
Antofagasta PLC fell 1.2% and Rio Tinto PLC (RIO) moved 0.6% lower
after HSBC's preliminary manufacturing Purchasing Managers' Index
for China fell to an eight-month low at 48.1. The result missed a
consensus forecast and showed further contraction in the
sector.
The pullback for the FTSE erased the index's gain of 0.5% last
week, the first weekly win in four weeks.
Lloyds Banking Group PLC shares, however, rose more than 1%
Monday, landing among the session's top price performers.
Investors began the week sorting through PMI reports from the
euro zone, with the overall composite index logging a
ninth-consecutive month of expansion, though the 53.2 reading for
March from market-research firm Markit was slightly down from
February's result of 53.3.
Private-sector output in France this month expanded to a
31-month high, but activity in Germany -- Europe's largest economy
-- unexpectedly slowed in March.
London stocks revisited session lows after Markit's initial PMI
for the U.S. fell to 55.5 in March from 57.1 in February, although
the report showed improving conditions for manufacturers. U.S.
stocks reversed course and fell after the data, with the S&P
500 index (SPX) falling roughly 1%.
Combined with other data for the euro area, the PMI reports
indicated economic recovery is underway, but there's limited scope
for the recovery to gather pace, said RBC in a note.
"While the headwinds from the crisis are easing, the ongoing
adjustment process will continue exerting a drag on growth,
particularly via domestic demand," said Timo del Carpio, European
economist at RBC Europe. "Moreover, against this backdrop of
sluggish activity, today's PMI data also highlight the very limited
inflationary momentum in the euro area."
Brown Brothers Harriman said key U.K. data coming this week will
be consumer-price and retail-sales figures for February, with
headline CPI expected to log its lowest print since October
2009.
Back to Lloyds, its shares rose 1.3% after a ratings upgrade to
buy from hold as Investec said it sees "reasonable value for a
low-risk stock."
Investec also noted confirmation of regulatory approval for the
acquisition of fund manager Scottish Widows Investment Partnership
by Aberdeen Asset Management, with the deal expected to close on
March 31. "Already treated as a 'done deal' with inclusion in
Lloyds' FY13 pro forma numbers, we are pleased to see this edge
towards completion."
Meanwhile, Standard Life PLC said it's in exclusive talks to buy
asset manager Ignis. Standard Life shares pared their advance,
ending up fractionally higher.
In other U.K. developments, the embattled Co-operative Bank said
it needs to raise 400 million British pounds ($659.48 million)
after discovering that its capital position is weaker than it
anticipated. Costs for the company have increased in part because
of mis-selling of payment protection insurance. The company now
expects a loss of GBP1.2 billion to GBP1.3 billion for 2013.
Off the FTSE 100, Carphone Warehouse Group PLC fell 4.8% after
the mobile-phone retailer and Dixons Retail PLC said they've been
given more time by a U.K. regulator to discuss a possible merger.
Shares of Dixons had spiked higher after a Sky News report that the
private equity group that owns Phone4u has approached electronics
seller Dixons about a possible tie-up. But the shares ended with a
modest 0.2% gain.
British Gas owner Centrica PLC fell 1.9%, and SSE PLC lost 2.3%,
among those in the utility sector that saw their shares fall on
news reports that a regulator may look into a break up of the
U.K'.s "Big Six" energy companies.
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