By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. equities fell Wednesday, easing
from a nearly two-week high, with Wm. Morrison Supermarkets PLC
down after a broker cut its estimates on the grocery chain, while
Associated British Foods PLC shares sweetened on the company's
plans to expand overseas.
The FTSE 100 index slipped 0.1% to 6,674.74. The benchmark on
Tuesday closed at its highest level since April 4, fueled by a
rally in drug makers. Wednesday's loss was the index's first after
three consecutive sessions of gains.
On the losing end of the index was ARM Holdings PLC , with
shares of the computer-chip designer down 2.8% as the company's
growth in royalty revenue came in at 3%, rising to $144.5 million
for the first quarter. That figure was less than the 32% growth
posted in the year-ago quarter. ARM reported a rise in overall
quarterly profit.
Also hit was Morrisons , which dropped 3.7% after J.P. Morgan
Cazenove reduced its per-share earnings estimates for 2015/2016 by
18% in the wake of the company's annual report released last
week.
But investors embraced a plan by Associated British Foods PLC to
expand to the U.S., pushing shares up by 8.8% for their strongest
gain since March 2000, according to FactSet data. The company will
open Primark stores in the northeastern region of the U.S., with
the first one in Boston. Primark sells a range of products,
including clothing and accessories and housewares. AB Foods also
said strength in Primark and its grocery units aided in a rise in
half-year profit.
The Primark's move in the U.S. toward the end of next year, "is
sooner than we had anticipated, and whilst Primark will continue
its measured approach to expansion, in our view this significantly
increases the growth potential of Primark," said Panmure & Co.
analysts Graham Jones and Damian McNeela, outlining their rating
upgrade on AB Foods to buy from hold.
Meanwhile, investors received minutes from the Bank of England's
policy meeting held earlier this month. The board voted 9-0 in
favor of keeping interest rates on hold and making no changes to
its 375 billion pound ($631 billion) asset-purchase program.
The meeting marked the central bank's last under previous
guidance to raise its key interest rate until the unemployment rate
remained above the 7% threshold. The bank reached that threshold
sooner than it anticipated, with February's report showing the
unemployment rate fell to 6.9%.
Separately on Wednesday, data showed U.K. borrowing was GBP107.7
billion ($181 billion) in the 2013-2014 fiscal year, the lowest
amount since the worldwide financial crisis.
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