By Sara Sjolin, MarketWatch
Data confirm U.K. economy was top performer last year
LONDON (MarketWatch) -- Heavyweight oil producers slammed U.K.
stocks lower on Tuesday, but the benchmark index was still on track
for its best quarter since December 2013.
The FTSE 100 index dropped 0.9% to 6,832.59, erasing a 0.5% gain
from Monday. The index was on track for a 4% quarterly gain, which
would mark the biggest advance since a 4.4% rally logged in the
last quarter of 2013.
For the month, the FTSE was eyeing a 1.7% decline,
underperforming the other major European benchmarks. Fund managers
and investment banks say they are cautious about buying into the
U.K. stock market ahead of the May 7 general election. Read: Stocks
to watch with U.K. election just weeks away
(http://www.marketwatch.com/story/be-wary-of-these-uk-stocks-ahead-of-general-election-fund-managers-say-2015-03-30)
(http://www.marketwatch.com/story/be-wary-of-these-uk-stocks-ahead-of-general-election-fund-managers-say-2015-03-30)Oil
blues: Oil companies added the most pressure on the FTSE 100 on
Tuesday, tracking a more-than 2% decline in crude prices
(http://www.marketwatch.com/storyno-meta-for-guid). Oil prices have
been sliding in recent days, as investors wait for the outcome of
the Iranian nuclear talks, which could pave the way for more
Iranian crude flooding an already oversupplied global market.
Shares of Tullow Oil PLC fell 1.9%, BG Group PLC lost 1.4%, BP
PLC (BP) gave up 1.4% and Royal Dutch Shell PLC (RDSB) dropped
1.1%.
Other stocks to watch: Tobacco firms were also among major
decliners on Tuesday, due to what Tony Cross, market analyst at
Trustnet Direct, described as waning consumer demand in China.
"And it's the aspirational or luxury brands that will be left
most exposed," he said.
Shares of Imperial Tobacco Group PLC (ITYBY) dropped 2.5% and
British American Tobacco PLC (BTI)fell 2.1%. Luxury-goods maker
Burberry PLC (BURBY) erased 1.1%.
Shares of Meggitt PLC lost 3.2% after Exane BNP Paribas
initiated coverage of the engineering company with an underperform
rating.
Leading advancers, shares of Kingfisher PLC jumped 3% after the
do-it-yourself retailer said it will close about 60 stores in its
U.K. chain B&Q
(http://www.marketwatch.com/story/kingfisher-net-profit-falls-will-close-stores-2015-03-31)and
its "few loss-making stores" in Europe.
Pound climb: Sterling advanced against the euro (GBPEUR) and
briefly erased its loss against the dollar (GBPUSD) after the
Office for National Statistics said the U.K. economy expanded 0.6%
in the fourth quarter, and not by 0.5% as previously estimated.
For the full year of 2014, the U.K. economy grew by 2.8%
compared with 2013, 0.2 percentage points higher than what was
previously reported. The data confirm that the U.K. was the top
performing major Western nation
(http://www.marketwatch.com/story/uk-top-performing-in-west-as-2014-gdp-revised-up-2015-03-31)
last year.
The pound (GBPEUR) rose to EUR1.3777 from EUR1.3675 late Monday.
Against the dollar, sterling(GBPUSD) traded as high as $1.4817, up
from $1.4770 ahead of the GDP data and higher than Monday's
$1.4813. It traded at $1.4782 at the latest.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires