Primark parent ABF jumps after upbeat outlook
U.K. stocks declined Thursday, in line with a selloff in global equity markets, as the European Central Bank added to signals that central banks in major economies are on the path toward tighter monetary policy.
Among big stock movers, Reckitt Benckiser Group PLC dropped after a sales warning, while Associated British Foods PLC jumped after an upbeat outlook.
The FTSE 100 shed 0.4% to close at 7,337.28, with only the financial and oil and gas sectors moving higher. The London benchmark on Wednesday ended 0.1% higher (http://www.marketwatch.com/story/ftse-100-gains-ground-as-home-builders-miners-move-higher-2017-07-05) after a choppy session.
London-listed blue-chips fell alongside European equities after minutes from the ECB's June meeting (http://www.marketwatch.com/story/ecb-considered-abandoning-vow-to-accelerate-qe-2017-07-06)showed policy makers talked about dropping a pledge to bolster its bond-buying program. That was part of a discussion on how to communicate increased confidence in the eurozone economy without jolting markets.
Quantitative easing by central banks world-wide has helped to support gains for equity and bond prices. U.K. stocks have benefited from the ECB's bond buying as investors use proceeds from sales to purchase other assets, including stocks.
Read: German bonds may offer the clearest warning that the stock market's bull run is sputtering (http://www.marketwatch.com/story/german-bonds-may-offer-the-clearest-warning-that-the-stock-markets-bull-run-is-sputtering-says-mcclellan-2017-06-30)
Banks rose after the minutes as the prospect of tighter policy sent yields higher. Shares of Barclays PLC (BCS) (BCS) gained 2.4%, Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) climbed 1.6% and Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) added 1.5%.
After the U.K. market closed on Wednesday, minutes from the U.S. Federal Reserve showed policy makers appeared at odds (http://www.marketwatch.com/story/fed-might-start-balance-sheet-drawdown-in-september-fomc-minutes-hint-2017-07-05) over when the central bank should reduce its $4.5 trillion in debt holdings, thereby pulling back on its support for the U.S. economy. One issue was inflation, which suffered a puzzling slowdown recently.
Read:Investors face a long, hard road back to 'normal' (http://www.marketwatch.com/story/investors-face-a-long-hard-road-back-to-normal-2017-06-29)
Read:Will the Bank of England's 10-year hiatus on rate increases end soon? What analysts say (http://www.marketwatch.com/story/will-the-bank-of-englands-10-year-hiatus-on-rate-hikes-end-soon-what-analysts-say-2017-07-05)
Stock movers: Shares of Reckitt Benckiser (RB.LN) dropped 1.5% after the consumer-products heavyweight cut its 2017 sales forecast. The maker of Lysol, Enfamil and other household goods said it expects to permanently lose some revenue after last month's cyberattack (http://www.marketwatch.com/story/reckitt-benckiser-to-lose-revenue-post-cyberattack-2017-07-06). caused production difficulties in some factories.
Ingredients producer Associated British Foods PLC (ABF.LN) shares jumped 2.6%. The move came after a strong performance by ABF's its Primark fashion-retail chain prompted the company to say its full-year outlook has improved (http://www.marketwatch.com/story/abf-outlook-edges-up-due-to-strong-primark-trading-2017-07-06).
(END) Dow Jones Newswires
July 06, 2017 12:42 ET (16:42 GMT)