UK stocks have experienced the biggest decline in last 10 weeks, thereby paring with the biggest monthly advance of the same since October, 2011. The shares tumbled mainly because of two reasons: AstraZeneca Plc. profit is expected to decline in 2013 and Royal Dutch Shell Plc. has missed the estimates when it comes to their earnings. Incidentally, Royal Dutch Shell is the biggest oil producer in the entire Europe. On the other hand, AstraZeneca is the 2nd largest drug maker in United Kingdom.
The benchmark gauge of UK, FTSE 100 Index tumbled by around 46.23 points and is at 6276.88 currently. This marks the biggest decline of the benchmark gauge since 16th November, 2012. Despite the loss, the benchmark is still 6.4% higher than where it finished last year. As the US lawmakers agreed on a compromise budget, the gauge has started the best year since 1989. On the other hand, the broader FTSE All Share Index declined by 0.6% and the ISEQ index, benchmark gauge of Ireland, experienced a tumble of 0.1%.
According to the Head of Portfolio Strategy Department of Brewin Dolphin Securities, Guy Foster, the markets are currently pushing for breath. They have already experienced a strong run and now going through a slight downturn. Guy added that the overall UK earnings will be kind of mixed bag and the companies which will publish bad outlook, are almost certain to get punished.
Royal Dutch Shell experienced a drop of 2.8% and each of its shares is currently priced at 2241 pence. This marks the biggest decrease for the company within a year. Excluding the inventory changes and the onetime items, the estimated 4th quarter profit for the company is $5.6 billion. This is lower than the initial estimates of $6.2 billion.
AstraZeneca also had the biggest tumble in 9 months, that of 3.2%. Each of AstraZeneca shares cost 3053 pence now. The company has announced that the sales will fall by a high single digit percentage, whereas, the analysts predicted it to be dropping by 3%.
Among others, HSBC Holdings went down by 1% to finish at 716.7 pence per share. The Royal Bank of Scotland Group also declined by 1.1%. Incidentally, both these lenders, along with Lloyds Banking Group and Barclays Plc. have decided to compensate the small businesses for selling the interest rate derivatives inappropriately.