By Sarah Turner
LONDON (Dow Jones)--British stocks declined on Tuesday, with
markets reversing gear after briefly trading at a level not seen
for more than a year.
In a choppy session, the U.K. FTSE 100 index closed 1.1%, or 56
points, lower to 5,145.15.
Earlier, the index hit an intra-day high of 5,221.65, a level
not seen since September 2008.
Decliners outnumbered gainers across the London exchange by a
5-to-a-3 margin.
Banks were weak through the session, with Barclays (BCS) shares
down 3.4%, Royal Bank of Scotland shares down 2.4% and Lloyds
Banking Group (LYG) down 2.1%.
Lloyds could have to pay as much as 2 billion pounds ($3.1
billion) to end its participation in the U.K.'s asset-protection
scheme, according to a Bloomberg report.
The worst performer was Marks & Spencer , down 4.3% after
holding a presentation to investors.
The market decline came on a day where data showed British
consumer prices rose at their slowest annual pace in five years in
September.
However, sales at U.K. stores that have been open for at least a
year rose 2.8% in September compared with the same month last year,
according to the British Retail Consortium.
Also, a growing majority of British surveyors saw house prices
rise in September due to an ongoing lack of homes for sale, the
Royal Institution of Chartered Surveyors reported.
Shares in home builder Bellway fell 1.4%.
Investors weighed a fiscal-year loss with comments that markets
have improved in recent months and the firm is starting to rebuild
its land bank.
Other home builders were weak, with Taylor Wimpey shares down
3.7% and Persimmon shares down 5.1%.
On the plus side, shares of sugar producer Tate & Lyle
climbed 5.3%.
The firm was upgraded to outperform from neutral at Credit
Suisse, which said it sees improved trading for the group. Industry
starch volumes are recovering, U.S. exports of high-fructose corn
syrup to Mexico are growing, corn prices are low and ethanol prices
have started to edge up. Tate & Lyle is also a turnaround story
with a new CEO, the broker said.
Other notable movers included ITV , up 6.8%.
The commercial television broadcaster said that it intends to
issue around 120 million pounds of bonds and that it remains on
course to outperform the TV advertising market.
The rate of decline in U.K. television advertising has continued
to ease across the second half of 2009. ITV family television
advertising revenues are expected to be down around 3% year-on-year
in October 2009. Current forecasts for November suggest a similar
level of year-on-year decline, it added.
Shares of hotel and restaurant operator Whitbread rose 0.5%.
The firm's net income for the six months to Aug. 27 rose 81% to
73.6 million pounds ($116.3 million). Revenue grew 3% to 703.3
million pounds as declining revenue at its hotels and restaurants
business was partly offset by a 20% rise in sales at its Costa
coffee chain.
Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274