By Carla Mozee, MarketWatch
LONDON -- U.K. stocks edged lower Tuesday, with the FTSE 100
index notching its first decline in three sessions as shares of
telecommunications company BT Group PLC and oil firm BG Group PLC
declined.
The U.K. FTSE 100 index ended down less than 2 points at
6,873.55, narrowing its intraday fall.
BT Group shares also came off deeper losses, but still ended
down 2.4% as rival British Sky Broadcasting Group PLC outlined the
launch of its first channel dedicated to European soccer. The Sky
Sports 5 channel will show more than 600 live matches next season,
and will be at no extra cost to customers with its sports package.
Sky also said customers may also sign up for two years of free
broadband unlimited service.
But BSkyB shares also lost ground, giving up 0.8%.
A downgrade to a neutral rating from outperform by Exane BNP
Paribas triggered a 0.7% decline for oil company BG . "Expectations
around corporate action at BG appear high to us, and we believe
there is no room for half-baked measures for BG's potential new
CEO," wrote analyst Alejandro Demichelis in a note Tuesday. "While
we see scope to unlock value, we feel the market is underestimating
the task ahead."
BG in late April said Chris Finlayson resigned as chief
executive for personal reasons, and that its 2014 production will
be at the lower end of guidance.
At the same time, Sports Direct International PLC shares sagged
1.2% upon removal from Goldman Sachs's conviction-buy list, "as the
upside to our target price is now lower following a period of good
performance. We have higher conviction elsewhere in the European
retail sector as a result," said analysts at Goldman.
But appearing in the plus column were shares of Imperial Tobacco
Group as they gained 0.8%. The firm said it plans to spin off its
CompanÃa de Distribucion Integral Logista Holdings S.A. unit in an
initial public offering in Spain.
Further signs of strength in the British economy arrived Tuesday
as the Office of National Statistics said U.K. manufacturing output
rose by 0.4% on the month in April, and by 4.4% on the year.
April marked the fifth consecutive rise for manufacturing
output, and the U.K. economy "is increasingly firing on all
cylinders, setting up the second quarter for another strong growth
reading," wrote Rob Wood, chief U.K. economist at Berenberg, in a
Tuesday note. The data support its forecast for an acceleration of
second-quarter growth to 0.9% on a quarter-over-quarter basis, "and
for the first [Bank of England] rate hike to come in November
2014."
The British economy has now expanded beyond its pre-recession
peak, and is roughly 0.2% above where it was in January 2008, the
National Institute of Economic and Social Research said Tuesday.
The nonpartisan think tank estimated growth of 0.9% in gross
domestic product in the three months ending in May, compared with
1.1% growth in the three months ending in April.
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