London: Britain’s top share index slid into the red on the last trading day of the quarter on 30 March, as a profit margin drop hit Vodafone, and economic worries gnawed at investors ahead of a key rate decision next week.
Vodafone slid 4.3%, its biggest daily fall in a year, after the mobile phone operator unveiled lower-than-expected margins in its crowded home market as it slashed tariffs to win customers and warned of challenges across Europe.
The FTSE 100 ended down 16.2 points, or 0.26%, at 6,308, having gained 1.4% in the last quarter.
“We’ve ended the quarter more or less where we started it. We haven’t made an awful lot of progress,” said Mike Lenhoff, chief strategist at Brewin Dolphin.
“You’ve got a market that doesn’t want to move decisively one way or the other,” he added. “It’s quite happy to tread water.”
Strategists also cited investors’ nervousness about the outlook for UK interest rates ahead of the Bank of England’s decision on borrowing costs next Thursday.
Oil shares also dragged the market lower, despite US crude oil prices holding around $66 a barrel amid escalating tensions between Britain and Iran over the detention of 15 British sailors, as well as a strike in France.
BP was off 1%, while rival Royal Dutch Shell dipped 1.1% and BG Group lost 0.5%. The sector was the second biggest loser in the index.
European shares trimmed some losses after the release of US personal income and spending data. The Commerce Department said US personal income rose 0.6% in February, below the unrevised 1.0% gain for January but double the 0.3% increase forecast by analysts in a Reuters poll.
Consumer spending also rose.
Europe’s biggest home improvements retailer Kingfisher advanced 2.9% and touched a two-year high to top the FTSE 100 leaderboard on media reports that the private equity arm of Goldman Sachs was sizing up a bid, traders said.
The Times newspaper quoted unnamed industry sources as saying the US investment bank had been working on a possible bid for the company.
Home Retail Group was up 0.9%.
However, Resolution lost 4.1% after the insurer said possible takeover talks had ended.
British Airways fell 2.4% on fears of a bidding war for Iberia involving the British airline. The concerns came after Texas Pacific Group asked the Spanish airline for access to its books to decide whether to make a takeover bid at an indicative price of 3.6 euros a share.
In other M&A activity, Rentokil Initial advanced 2.7%. US conglomerate United Technologies Corp. is to buy the electronic security division of the services group for 595 million pounds ($1.2 billion), the two firms said.
Miners also gained, benefiting from stronger gold and copper prices. Antofagasta, Rio Tinto and Xstrata all added more than 1%.