By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in the U.K. fell Tuesday, with
SABMiller shares giving back some gains made in the previous
session, but an upgrade for publisher Pearson lifts its shares.
Data: Stocks held to losses after the U.K.'s inflation-rate
reading for August came in below expectations, which eases pressure
on the Bank of England to raise interest rates. The FTSE 100 index
was down 0.2% at 6,792.174. The index finished 0.1% lower on Monday
on market uncertainty about whether Scotland will vote to break
away from the U.K.
The U.K.'s Office for National Statistics on Tuesday said August
inflation was 1.5% on a year-over-year basis. Analysts polled by
The Wall Street Journal had expected, on average, inflation to hold
steady at 1.6%. Declines in prices for motor fuels, food and
non-alcoholic beverages were the largest contributors to the
downward trend.
Separately, the ONS said U.K. housing prices in August rose
11.7% in the year to July, with prices in London surging 19.1% in
the year.
The pound (GBPUSD) edged up to $1.6178 following the ONS data,
from $1.6171 ahead of the releases. Sterling late Monday was buying
$1.6231.
Stocks: On Tuesday, SABMiller PLC (SBMRY) fell 2.1%, weighing
down the FTSE 100. The shares on Monday leapt 8.7% on news that
Anheuser-Busch InBev NV (AHBIY) was talking to banks about
financing a deal to buy the London-listed brewer.
Also down were shares of chip designer ARM Holdings , down by
2.4%, in line with a hefty selloff in tech stocks overnight on Wall
Street.
Off the FTSE 100, shares in ASOS PLC fell 11% after the online
fashion retailer warned on 2015 profit, with analysts estimating
the earnings downgrade could reach as much as 30%.
Pearson shares , however, topped the FTSE 100, rising 1.7% after
Morgan Stanley upgraded the publisher's stock to overweight from
equal-weight. "We think the restructuring is complete," and
per-share earnings at Pearson could rise 15% to 20% in 2015, its
analysts said. The publishing company "now addresses a bigger
market with a more flexible cost base. It is time to own Pearson
again," wrote Morgan Stanley analyst Patrick Wellington in a
note.
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