February 20, 2014 9:18 am

BAE Systems leads losses for Europe’s stocks

BAE Systems took a big hit on Thursday after announcing it expected this year’s annual profits would be down as much as 10 per cent from 2013.

Shares fell 9.4 per cent to 395.8p after the British defence contractor said tough US budget pressures and the absence of a one-off lift from a last-minute accord on a huge fighter jet contract with Saudi Arabia would hit annual earnings.

Meanwhile, Europe’s resource stocks led heavy selling on the region’s main equities indices, after data from China pointed to a manufacturing slowdown in the world’s main market for base metals.

HSBC’s preliminary purchasing managers’ index came in at a seven-month low of 48.3 under the 50-reading that indicates expansion.

Mining stocks fell across the board in London, with Anglo American down 2.3 per cent at £15.52, while Antofagasta fell 1.7 per cent to 943p, BHP Billiton lost 1.3 per cent weaker to £19.39 and Vedanta Resources shed 4.5 per cent lower to 869p.

The FTSE 100 was down 0.7 per cent at 6,750.79.

Rexam, the world’s biggest maker of beverage cans, slid 9.2 per cent to 476.1p after it said volumes in western Europe and South America were “disappointing”, especially in the first half of the year.

Centrica, the owner of British Gas, fell 1.6 per cent to 308.9p after it reported a 2 per cent dip in 2013 operating profit of £2.7bn and said margin pressures and “unusual weather patterns” in the Atlantic could drag on profit in the current year, as it continues to face political scrutiny on its business.

The pan-European FTSE Eurofirst 300 fell 0.9 per cent to 1,327.22.

Suez Environnement, the French water group, was a bright spot, up 5.4 per cent at €13.90 after it reported core earnings of €2.52bn for 2013, up 5 per cent on an organic basis.

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