MW: Metal extractors, oil producers pace losses for U.K. shares
FTSE 100 index down 0.9%; WPP downgraded at Citigroup
LONDON (MarketWatch) -- British shares fell on Thursday, with metal stocks and oil producers paring some of the sharp gains made in the previous session, ahead of U.S. jobs data.
UK:UKX 4,307, -33.46, -0.77%
4,4004,3504,3004,2504,200
MTWT
The FTSE 100 index (UK:UKX 4,307, -33.46, -0.77%) declined 0.9%, or 38.72 points, to 4,301.87, paring some of Wednesday's 2.2% advance.
Shares trading in other European equity markets were also lower, while U.S. stock futures declined. See Europe Markets.
Data on U.S. nonfarm jobs is due later in the session. Many Wall Street economists believe that the decline in June nonfarm employment will top the 345,000 job losses recorded in May but still be significantly below the 504,000 jobs cut in April. See full story.
Metal extractors and oil producers were some of the worst performers in London on Thursday, giving back some strong gains made in the previous session.
Shares of Anglo American (UK:AAL 1,793, -41.50, -2.26%) fell 2.7%, shares of BHP Billiton (UK:BLT 1,398, -28.00, -1.96%) (BHP 54.90, -0.60, -1.08%) fell 2.1% and shares of Rio Tinto (UK:RIO 2,118, -40.00, -1.85%) (RTP 163.10, -0.88, -0.54%) declined 2.3%.
Rio Tinto said that shareholders have subscribed to nearly 97% of the British portion of the miner's share-rights issue. See full story.
Away from commodity stocks and advertising firm WPP Group (UK:WPP 398.25, -15.00, -3.63%) (WPPGY 33.94, +0.68, +2.04%) fell 3% after Citigroup downgraded the firm to sell from hold.
The broker said that a continuation of the trends in the second quarter would suggest a 7.5% organic sales decline in fiscal 2009 and limited growth in fiscal 2010.
On the plus side of broker action, UBS upgraded banking group Standard Chartered (UK:STAN 1,192, +13.00, +1.10%) to neutral from sell. Shares rose 1%.
The broker said revenues in the wholesale banking business are again outperforming and it now sees this business making a pretax profit of $2.5 billion in the first half of 2009 -- nearly four times its earning of four years ago.
Standard Chartered said that it has appointed John Peace as its new chairman, while reports that it is in advanced talks to acquire various parts of the retail and commercial Asian banking operations of the Royal Bank of Scotland Group (UK:RBS 39.24, -0.17, -0.43%) , also likely kept the firm in focus. See full story.
Royal Bank of Scotland shares lost 0.3%.
Shares of brewer and pub operator Greene King (UK:GNK 423.75, +13.00, +3.17%) rose 3.2% outside the top index.
Profit for the fiscal year ended May 3 fell 68% to 39.5 million pounds ($65.1 million). The drop in profit was mainly due to a 53.5 million pound impairment charge.
The group, which recently completed a 207.5 million pound rights issue, said trading has been stronger since the start of the new fiscal year, with comparable sales in its Greene King retail business up 5.2%.
"Greene King's successful rights issue leaves it best placed to exploit the opportunities to acquire top assets and sensible prices and/or retire debt at a discount. This envious position is not reflected in its valuation and the stock is now excellent value, in our view," said analysts at Evolution Securities.
Shares of Intermediate Capital Group (UK:ICP 513.50, +24.00, +4.90%) rose 4.5% after the company announced a 7-for-2 rights issue to raise 351 million pounds ($577 million), priced at a 39% discount to its theoretical ex-rights price.
It plans to capitalize on the investment opportunities in the primary and secondary market for buyout capital, as well as participate in the refinancing of existing buyout transactions emerging from the current market environment. The company also said it's extended the maturity of 395 million pounds of bank debt.
On the downside, shares of PC and video-game retailer Game Group (UK:GMG 148.75, -15.50, -9.45%) fell 9.8%.
In the 21 weeks to June 27, total sales fell 9.1% and comparable sales declined 15.4%.
The sales performance met expectations, given very strong sales last year, a period which included software releases such as Mario Kart, Wii Fit and Grand Theft Auto (GTA) IV, the firm said.
