By Barbara Kollmeyer, MarketWatch
Royal Mail hit by broker downgrade; grocers get a lift
MADRID (MarketWatch) -- U.K. stocks were looking down the barrel
of a third session of losses on Tuesday, weighed down as
heavyweight HSBC Holdings PLC continued to feel the sting of
tax-evasion revelations, and as commodity stocks took another
fall.
While the rest of Europe got a boost from helpful headlines
stemming from Greece, that didn't filter over to London. In Europe
and London, markets have recently been suffering amid escalating
brinkmanship between Greece and its eurozone partners. The FTSE 100
index pared earlier losses, but was still going nowhere, down 0.1%
to 6,828.06.
Greek stocks rebounded on hopes for a deal with international
creditors, and markets in Europe extended gains after The Wall
Street Journal reported after senior Greek government officials
told The Wall Street Journal that Greece will proceed with the
privatization of the country's main port. That would mark a U-turn
for the country's new government, which has vowed to roll back many
austerity measures.
Gainers outpaced decliners in London, but that didn't matter
much with the most heavily weighted stocks under pressure. HSBC
(HSBC) fell 1.4%, on the heels of a 1.6% drop Monday. That decline
came after media reports highlighted fresh details of tax-evasion
claims at the bank and allegations of its dealings with dictators
and arms dealers.
Read: HSBC should be probed, Democratic senator says
Barclays PLC (BCS) fell 0.7%.
Another major pressure for the index came from oil names as
crude prices continued to lose ground, backing away from recent
gains. Extending losses into London's afternoon, March crude
futures (CLH5) fell $1.54, or 2.8%, to $51.36 a barrel. Shares of
BP PLC (BP) slid 2.9%, and Royal Dutch Shell PLC (RDSA) (RDSB) lost
1.7%.
Mining stocks also fell, with Rio Tinto PLC (RIO) tumbling 3.4%
and BHP Billiton PLC sliding over 3%. Anglo American PLC dropped
3.5%. Those losses came after China reported another piece of
disappointing data, with consumer prices slipping to a five-year
low, adding to concerns about deflation in a slowing economy.
A broker downgrade hit shares of Royal Mail Group PLC . The mail
carrier was off 4% after J.P. Morgan Cazenove cut it to neutral
from overweight, citing a "diminished risk/reward profile" and
concerns about a near-term decline of consensus estimates.
On the plus side, retail-related stocks were higher, with
retailer Marks & Spencer Group PLC was among the stocks pushing
higher, up 4%, and Wm Morrison Supermarkets PLC rose 4% and Tesco
PLC jumped 3.5%. Gains for the sector came after market researcher
Kantar Worldpanel reported that the grocery sector in the U.K. grew
at 1.1%, the fastest rate of growth since June 2014.
Tesco returned to growth for the first time since January 2014,
and Morrison's sales fell by 0.4%, which was the best performance
from the retailer since December 2013, said Kantar.
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