By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks moved lower Wednesday as
concerns about Royal Mail PLC's growth pressured the company's
shares, while pub-landlords traded in the red following a vote in
parliament that was unfavorable for the sector.
The benchmark FTSE 100 index fell 0.2% to 6,696.99.
On the FTSE 250 index , shares of Enterprise Inns PLC tumbled
17% along with other brewery-landlords after U.K. lawmakers voted
to allow pub tenants to buy beer from any source and not be tied to
drinks supplied by the property owner. Shares of Punch Taverns PLC
were shoved 11% lower, Greene King PLC lost 4.9% and Spirit Pub Co.
sank 7.4%.
Meanwhile, the pound rose against the dollar in the wake of
minutes released from the Bank of England's meeting earlier this
month. Sterling (GBPUSD) bought $1.5688, compared with $1.5598
ahead of the release of the minutes. Sterling bought $1.5632 late
Tuesday.
The minutes showed the central bank's Monetary Policy Committee
voted 7-2 to keep rates on hold, with seven members in favor of
leaving the key interest rate at a record low of 0.5%. Policy
makers Martin Weale and Ian McCafferty dissented, as they did at
the August and September meetings.
"Given the recent sharp falls in [consumer prices], it was
reasonable to expect that MPC members McCafferty and Weale would
have dropped their hawkish views. But this wasn't to be as they
again voted for a 25 basis-point rate rise," said Fawad Razaqzada,
technical analyst at Forex.com, in a note. "The market reacted
immediately to price in a less dovish BOE than previously
thought."
Earlier this week, government data showed U.K. inflation in the
U.K. rose by 1.3% in October, compared with 1.2% in September. But
the October result was still below the Bank of England's target of
2%.
Leading losses on the FTSE 100, shares of Royal Mail PLC tanked
7.6% after the parcels company said competition from Amazon.com
Inc. (AMZN) -- which launched its own delivery service -- will
limit its growth. Royal Mail also said expansion plans by Whistl,
formerly known at TNT Post UK, could reduce its revenue by 200
million pounds ($313.7 million) in 2017-2018.
Royal Mail said half-year interim revenue rose to 4.53 billion
pounds ($7.08 billion) from GBP4.52 billion in the previous period.
Net profit, however, fell as results in the previous period
benefited from exceptional income related to pension provision.
The pub companies "may challenge whether such a change is legal,
but this could have material consequences for the tenanted pub
sector," said Barclays in a research note. "We estimate that the
biggest impact would be on Enterprise Inns and Punch Taverns, which
between them own over 9,000 tenanted pubs."
Back to the FTSE 100, mining stocks were hit hard as prices for
iron ore fell to a more than five-year low. Anglo American PLC fell
2.4%, Rio Tinto PLC (RIO) dropped 1.8% and BHP Billiton PLC (BHP)
fell 1.5%.
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