By Ben Eisen and Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- London stocks fell on Wednesday, with J.
Sainsbury PLC dragging the broader market south after issuing a
cautious outlook, and shares of heavyweights Aberdeen Asset
Management PLC and Tate & Lyle PLC also dropping.
The FTSE 100 index fell 0.5% to 6,721.78, after closing up 0.4%
the day prior at 6,755.45, the highest closing value since Nov. 4,
2013.
On the main index, shares of J. Sainsbury fell 2.4% after the
U.K.'s third-biggest supermarket chain on Wednesday reported a 0.2%
rise in third-quarter like-for-like sales, but said the general
economic backdrop remains uncertain and shoppers could spend
cautiously in the months after Christmas. Shares of fellow grocer
Tesco PLC slipped 1%,
Other decliners included Aberdeen Asset Management PLC , which
fell 3.6%, and Tate & Lyle PLC , which sank 3.4%. Aggreko PLC
dropped 2.9% and William Hill PLC was down 2.5%.
Cigarette makers were adding to the downside, with Imperial
Tobacco Group PLC off 2.9% and British American Tobacco PLC
slipping 1%.
On the upside, financial firms rose, with shares of Royal Bank
of Scotland Group PLC up 2.1% and Lloyds Banking Group PLC (LYG)
gaining 1.6%. RSA Insurance Group PLC , which provided a lift for
the broader index earlier this week, gained another 3%.
Away from the main index, retailers were under pressure.
Small-cap Mothercare PLC tumbled 31% after a profit warning. The
international mother-and-baby goods retailer said worldwide network
sales fell 4.4% in the 12 weeks to Jan. 4, with the U.K. hit
particularly hard by promotional sales over the Christmas period.
Mothercare's chief executive, Simon Calver, said the company
remains cautious looking forward and full-year profits will likely
be below the current range of market expectations.
On the data front, the Halifax House Price index showed a drop
of 0.6% in December, the first decline in a year. The Bank of
England's Monetary Policy Committee is due to announce a decision
on interest rates on Thursday. Economists largely expect the bank
will keep rates on hold, but there is speculation the unemployment
threshold, used to gauge whether interest rates should rise, will
be lowered as soon as the economy gathers strength.
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