By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks edged lower on Wednesday,
with heavily weighted oil stocks returning to the red.
The FTSE 100 slipped 3 points to 6,738.60. The index on Tuesday
jumped 1.3%, its best gain since early November, in part as energy
stocks rose following recent selloffs tied to worries about a
global oil-supply glut. Crude-oil prices were higher Wednesday,
though they still hovered around four-year lows.
But oil stocks in London pulled back Wednesday, with Royal Dutch
Shell (RDSB) falling 1.7%, leading losses on the FTSE 100. The
shares on Tuesday jumped 3.8%, and that surge was "clearly a
reaction to the oil price's move off the lows and to brokers' notes
suggesting that energy stocks are attractive at these levels," said
Bill McNamara, technical analyst at Charles Stanley, in a daily
update.
"That might be true, but they surely become less attractive the
longer Brent crude hovers around the $70 level," he said. "In
short, shareholders should be prepared for further volatility in
the near term."
Brent crude for January delivery traded at $70.95 a barrel.
Tullow Oil PLC shares lost 0.9%, BP PLC fell 0.8%, and BG Group
PLC dropped 0.3%.
Sage Group PLC rose 3.5%, the top gainer on the benchmark, after
the business software firm said it's confident it will reach its 6%
growth target for organic revenue, and organic operating profit
margin of 28% in 2015. It reported full-year net profit rose to
186.8 million pounds ($292.8 million) from GBP46.4 million. Revenue
slipped to GBP1.31 billion from GBP1.38 billion.
Margins at Sage Group "are holding up well," said Gareth Evans,
analyst at Westhouse Securities, in an note. Sage's announcement
"gives a degree of reassurance following management change and a
period of frustration over perceived lack of clarity and delivery."
Westhouse left unchanged its add stance and target price of GBP4.67
on Sage.
The pound (GBPUSD) climbed to session highs after U.K.
service-sector growth was stronger than expected in November.
Sterling bought $1.5648, and fetched as much as $1.5669. But the
pound was still slightly lower than late Tuesday's level around
$1.5653.
Markit and the Chartered Institute of Procurement & Supply
said the services-activity index rose to 58.6 from 56.2 in October,
supported by "firm demand and rising volumes of new business."
Analysts had widely expected a reading of 56.5.
Investors were also looking ahead to U.K.Treasury chief George
Osborne's Autumn Statement update to members of parliament,
scheduled for 12:30 p.m. London time. Osborne is expected to say
austerity measures will continue longer than expected as he reveals
the government's latest forecasts for the economy and spending
plans.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
