LONDON MARKETS: RBS, Royal Mail, Miners Weigh On London Stocks
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- London stocks stuck to the flat line on Wednesday, with pressure coming from Royal Bank of Scotland Group PLC , Royal Mail PLC and a flock of mining stocks as investors stayed locked on the potential for Federal Reserve tapering next week.
The FTSE 100 index was flat at 6,5197.63, with gainers barely outpacing decliners by the afternoon.
Shares of Royal Bank of Scotland Group PLC (RBS) fell 3.3% after the company announced its group finance director, Nathan Bostock, will be stepping down.
"This move is the latest in an ever-rowing list of problems for the 81%-government-owned bank and has come at a bad time during a review of their strategy and operations which is due to be released in February," Sam Fox, who works in financials sales, at Spread Ex, said in a note.
Lloyds Banking Group PLC (LYG) fell nearly 1% after the U.K. Financial Conduct Authority said it has fined the bank's units -- Lloyds TSB Bank PLC and Bank of Scotland PLC -- 28 million pounds ($45.8 million) for sales incentive failings. It's the biggest-ever fine imposed for such misconduct.
A string of mining stocks traded in the red, with Randgold Resources Ltd off 1.6%, BHP Billiton PLC (BHP) down 0.8%, Rio Tinto PLC (RIO) falling 1.1% and Anglo American PLC off 1.3%
Those losses came after Australia-based copper producer Oz Minerals Ltd. sank 14% overnight after it reportedly released weaker-than-expected guidance for output in 2014. Bloomberg reported that those shares fell 25% at one point in Australia's trading session, the biggest fall in over 20 years.
Away from the main index, shares of Royal Mail PLC fell 1.6% after Nomura cut shares to reduce from neutral, saying it could take time for the company's current restructuring plan to pay off for shareholders. There is "much to be done in the next 3-4 years in the face of falling letter volumes, competitive parcel markets and a sizeable investment program," analysts said.
Otherwise investors were watching the U.S., where a budget deal announced by U.S. lawmakers inspired some thinking among strategists that a tapering by the U.S. Federal Reserve next week could be more of a possibility. U.S. stock futures fell. The House and Senate will still need to approve the deal, which sets federal agency spending levels at $ 1.012 trillion for the current fiscal year.
The biggest loss of the day came for Imagination Technologies Group PLC , which sank 21% after first-half results disappointed and the company guided lower.
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