By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in the U.K. fell Tuesday, with
SABMiller PLC shares giving back some gains made in the previous
session, but an upgrade for Pearson PLC guided the publisher's
shares higher.
Data: Stocks held to losses after the U.K.'s inflation-rate
reading for August came in below expectations, which eases pressure
on the Bank of England to raise interest rates. The FTSE 100 index
finished 0.2% lower at 6,792.24. The index finished 0.1% lower on
Monday on market uncertainty about whether Scotland will vote to
break away from the U.K.
The U.K.'s Office for National Statistics on Tuesday said August
inflation was 1.5% on a year-over-year basis. Analysts polled by
The Wall Street Journal had expected, on average, inflation to hold
steady at 1.6%. Declines in prices for motor fuels, food and
non-alcoholic beverages were the largest contributors to the
downward trend.
Separately, the ONS said U.K. housing prices in August rose
11.7% in the year to July, with prices in London surging 19.1% in
the year.
The pound (GBPUSD), which has been hammered lately on
uncertainty surrounding the result of Scotland's independence
referendum to be held Thursday, traded at $1.6282, compared with
late Monday at around $1.6231.
Stocks: On Tuesday, SABMiller (SBMRY) fell 2.1%, weighing down
the FTSE 100. The shares on Monday leapt 8.7% on news that
Anheuser-Busch InBev NV (AHBIY) was talking to banks about
financing a deal to buy the London-listed brewer.
Also ending lower was chip designer ARM Holdings , by 1.9% after
keying off a hefty selloff in U.S. tech stocks overnight on Wall
Street.
Pearson shares , however, nearly topped the FTSE 100. They rose
1.7% after Morgan Stanley upgraded the publisher's stock to
overweight from equal-weight. "We think the restructuring is
complete," and per-share earnings could rise 15% to 20% in 2015,
its analysts said. The company "now addresses a bigger market with
a more flexible cost base. It is time to own Pearson again," wrote
Morgan Stanley analyst Patrick Wellington in a note.
Off the FTSE 100, shares in Asos PLC fell 8.9% after the online
fashion retailer warned on 2015 profit, with analysts estimating
the earnings downgrade could reach as much as 30%.
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