By Sarah Turner
Britain's top share index ended lower Wednesday, with BHP
Billiton slipping as investors fretted about a possible corruption
probe while banks declined amid worries that a new tax could be
slapped on lenders.
The FTSE 100 index declined 60.26 points, 0.6%, to close at
5,723.43. Other European shares lost ground, while U.S stocks were
flat to slightly lower.
BHP Billiton (BHP) shares fell 2.8%. The mining giant said it
has uncovered possible violations of anti-corruption laws by its
employees, following a request for information from the U.S.
Securities and Exchange Commission.
BHP also posted an 11% increase in third-quarter iron-ore
production on year to 31.16 million metric tons.
Other miners also lost ground, with Xstrata falling 3.9%, and
Vedanta Resources declining 2.4% as copper futures weakened.
Banks were also pressured, with Barclays (BCS) shares down 1.9%,
as investors weighed a proposal for a new tax for the sector ahead
of this weekend's Group of 20 meeting of finance ministers and
central bank governors.
U.K. broadcaster British Sky Broadcasting lost 0.6% after it was
downgraded to hold from buy at Royal Bank of Scotland, which said
IPTV (Internet-enabled TV) is a "growing threat on the horizon. We
believe Sky can continue to grow, but the pace is likely to slow,
and the shares could struggle to outperform."
The RBS analysts also see supermarket group Tesco entering the
pay-TV market, providing new competition for British Sky
Broadcasting which is 39% owned by News Corp, the parent of
MarketWatch.
Tesco rose 1.6% after it was upgraded to hold from sell on
Wednesday at Societe Generale, which said management has been
reassuring on the outlook for the group.
In earnings released the prior day, Chief Executive Terry Leahy
told analysts that he doesn't see food inflation falling further,
the U.K. economic recovery is underway, he sees encouraging trends
in non-foods, and international sales are looking up, the broker
said.
ARM Holdings , a supplier for Apple, rose 3.1% in London after
the iPod maker reported stronger-than-forecast results.
In the currency markets, sterling gained against the dollar,
trading up 0.1% at $1.5392, after the Bank of England said it was
more confident about the economy than when it made a 9-0 decision
to hold interest rates at 0.5% and maintain its 200 billion pound
asset-purchase plan. Also, data showed jobless claims fell 32,900
in March.
Outside the top index, bookmaker Ladbrokes climbed 3.4%.
It expects to receive 80 million pounds ($123 million) from the
U.K. tax authorities after reaching a settlement covering
substantially all the items outstanding in the tax years through to
December 2007.
However, Game Group shares slumped 11.9%.
Europe's top video game retailer announced the resignation of
its chief executive and U.K. chief operating officer after
reporting a 28% drop in annual profit and a continued slide in
sales. Its interim chief executive, Chris Bell, also is a Ladbrokes
veteran.