By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks fell into the red Wednesday,
as the benchmark FTSE 100 felt the weight of a slide in Fresnillo
PLC shares after the miner's financial update fell short of
expectations.
The FTSE 100 reversed course and dropped 0.3% to 6,867.24, as
the basic materials group lost nearly 2%.
The downward move was paced by Fresnillo as its shares sank
5.2%. The worst session for the shares since late January was
jump-started after the gold and silver miner reported a 22% decline
(http://www.marketwatch.com/story/fresnillo-net-profit-slumps-on-lower-metals-prices-2015-03-04)
in 2014 earnings before interest, taxes, depreciation and
amortization, or EBITDA, to $567 million. Analysts polled by
FactSet had been looking for EBITDA of $610 million. Revenue also
fell, by 12% to $1.41 billion.
Other mining stocks were also under pressure, with Glencore PLC
down 3.7%, adding to its 3.1% decline in the previous session. Rio
Tinto PLC (RIO) shares were off 2.5%, Anglo American PLC fell 2.3%,
and Antofagasta PLC moved 1.4% lower. BHP Billiton PLC (BHP)
declined 0.9%.
Mining and energy shares have a more than 20% weighting on the
FTSE 100, and recent share-price declines have contributed in
holding the FTSE 100 back from reaching a fresh record high after
the index twice last week marked its best closing levels since
December 1999. The benchmark on Tuesday
(http://www.marketwatch.com/story/ftse-100-pushes-to-record-high-but-glencore-barclays-fall-2015-03-03)
dropped 0.7%.
But among winning shares on Wednesday, ITV PLC drove to the top
of the blue-chip index, rising 5.2% after the broadcaster said it
will return 250 million pounds
(http://www.marketwatch.com/story/itv-returns-cash-to-shareholders-as-profit-rises-2015-03-04)
($384.5 million) to shareholders through a special dividend of 6.25
pence a share. The move comes as the company reported an increase
in net profit to GBP466 million on higher sales for the year.
Standard Chartered PLC shares climbed 3.8% as investors appeared
to embrace the Asia-focused bank's plan to conserve capital after a
37% drop in 2014 net profit to $2.51 billion. The company said it
will cut $25 billion to $30 billion in risk-weighted assets from
its balance sheet in the next two years, among other moves. But the
bank opted not to reduce its yearly dividend, saying that will
remain at 86 cents a share.
Meanwhile, the pound (GBPUSD) slipped to $1.5344 after Markit
and CIPS said their U.K. services PMI came in at 56.7 in February.
The reading missed expectations of 57.5 from analysts in a FactSet
survey. Ahead of the report, sterling traded at $1.5357, and at
$1.5361 late Tuesday in New York.
"Notwithstanding the small slide, the index still points to
strong growth. The correction appears normal given the sharp rise
in January," said Charalambos Pissouros, senior technical analyst
at IronFX Global, in a note. "Strong growth, rapid employment gains
and accelerating core inflation confirm the improving momentum of
the U.K. economy."
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