LONDON MARKETS: London Shares Lower As Vodafone Drops

Date : 07/20/2012 @ 7:31AM
Source : Dow Jones News
Stock : Rio Tinto (RIO)
Quote : 45.86  -0.07 (-0.15%) @ 12:11PM

LONDON MARKETS: London Shares Lower As Vodafone Drops

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By Kim Hjelmgaard, MarketWatch

LONDON (MarketWatch) -- Shares in British mobile operator Vodafone Group PLC weighed on the broader London market on Friday.

Vodafone (VOD) shares declined 2% as the world's largest telecom operator by revenue posted a worse-than-forecast drop in quarterly revenue to $16.90 billion, or a fall of 7.7% for the three months ended June 30.

Chief Executive Vittorio Colao cited difficult market conditions in southern Europe for the poor performance, although the firm's outlook for the full year was unchanged.

The FTSE 100 index lost 0.5% to 5,685.72, but is still on course for a weekly gain of around 0.4%.

On Thursday, the U.K. benchmark closed at its highest level since May.

Craig Erlam, market analyst at Alpari U.K., said: "Stocks have performed well this week. Better-than-expected corporate earnings in the U.S. has led to a seventh straight week of gains in the FTSE."

European stocks on the continent were also under pressure on Friday. The Stoxx 600 Europe shed 0.6% to 260.21 with investors keeping an eye on Spain's borrowing costs, which remain elevated.

Euro-zone finance ministers are holding a conference call Friday in which they're expected to approve the terms of a bailout for Spain's banks.

Separately, the German newspaper Rheinische Post reported that a senior member of Germany's coalition government said that Greece should depart the euro zone if it is not prepared to comply with EU-mandated reforms.

Elsewhere in London, the mining sector was providing a focus after Anglo American PLC reported that its iron-ore output advanced 12% on a quarterly basis to 12.9 million metric tons.

Meanwhile, output in diamond miner De Beers, in which Anglo American has a 45% stake, dropped 11% to 7.2 million carats.

Shares in Anglo American were up 1.1%.

Rival and fellow heavyweight miner Rio Tinto PLC (RIO) saw its shares fall just under 1% and BP PLC shares were off 0.6%.

Xstrata PLC announced that the chief executive of its Xstrata Alloys unit, Peet Nienaber, would retire for personal and family reasons.

Xstrata shares were 0.2% lower.

Among financial shares, heavyweight HSBC Holdings Inc. saw its shares fall 1.4% and Standard Chartered PLC lost 1.5%.

In deal news, shares in London Exchange Group PLC were up about 0.6% after Singapore Exchange Ltd. denied it was in talks with the LSE over a potential merger.

The report first surfaced in a Thursday story by the The Telegraph, a U.K. newspaper. A representative for LSE declined to comment on Friday.

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