Fitch Ratings lowers outlook on U.K. AAA rating to negative
By Clare Hutchison, MarketWatch
LONDON (MarketWatch)—Britain’s benchmark stock index traded lower on Thursday, as heavily weighted oil stocks headed south.
The FTSE 100 UK:UKX -0.18% slipped 0.2% to 5,934.95.
Investors also reacted to news that Fitch Ratings cut the U.K.’s credit outlook to negative from stable. In a statement late Wednesday, Fitch said the U.K.’s structural budget deficit is “second in size only to the U.S. and indebtedness is significantly above the triple-A median.”
However, the credit-rating firm affirmed Britain’s triple-A sovereign rating, saying the decision “reflects the progress made in reducing the government’s structural budget deficit and the credibility of the fiscal consolidation effort.”
In other news, U.S. initial jobless claims fell by 14,000 last week to 351,000, hitting a four-year low. Economists surveyed by MarketWatch had projected claims would fall to a seasonally adjusted 355,000 in the week ended March 10.
In stock action, oil producers weighed on the index. BG Group PLC UK:BG -0.88% shed 0.8%. BP PLC UK:BP -1.00% BP -0.21% gave up 1.1% and Royal Dutch Shell PLC RDS.A -0.27% UK:RDSA -0.81% dropped 0.8%.
Shire PLC UK:SHP -1.57% SHPGY -0.30% slipped 1.6%. The biopharmaceutical company said Wednesday that it was withdrawing an application to the U.S. Food and Drug Administration for its Replagal product, which treats a rare genetic disorder. Shire said discussions with the FDA led it to believe more tests would be required before approval could be given, which would cause a significant delay in producing the drug.
Supermarkets also sustained early losses. Tesco PLC UK:TSCO -1.23% was among the sharpest decliners in the FTSE 100, after the company confirmed that its U.K. CEO would step down after less than a year in the position.
The move comes after the supermarket issued a profit warning following its worst Christmas trading period in decades. Tesco shares slipped 1.3%.
Meanwhile, J Sainsbury PLC UK:SBRY -1.16% lost 1.2% and Wm. Morrison Supermarkets PLC UK:MRW -0.54% gave back 0.6%.
Retail on the rise
In contrast, retailers occupied higher ground for a second day, led by Next PLC UK:NXT +2.35% . The chain added 2.3%, while rival Marks & Spencer Group PLC UK:MKS +1.21% climbed 1.2%. Home-improvement retailer Kingfisher PLC UK:KGF +1.12% moved up 1.1%.
Heavily weighted telecom firm BT Group PLC UK:BT.A -0.83% lost 0.7%.
Utilities also suffered, with Centrica PLC UK:CNA -0.98% down 1%. United Utilities Group PLC UK:UU -1.20% shed 1.2% and National Grid PLC UK:NG -0.91% fell 0.8%.
On the positive side were the miners, amid rising metals prices. Rio Tinto PLC UK:RIO +1.48% advanced 1.5% while Kazakhmys PLC UK:KAZ +1.86% and BHP Billiton PLC UK:BLT +1.23% BHP +1.10% climbed 1.9% and 1.2%, respectively.
Among banks, Lloyds Banking Group PLC UK:LLOY +0.95% LYG -0.46% increased 0.9% and Barclays PLC UK:BARC +0.58% BCS -0.25% advanced 0.5%.
