UK stocks are little changed

Reuters.

A trader monitors the screen on a trading floor in London.

London - UK stocks were little changed as Cypriot lawmakers debated a bank-deposit levy and US housing starts exceeded estimates.

Rio Tinto Group dropped to a three-month low as the world’s second-biggest mining company forecast a decline in iron ore prices because of new supplies.

Weir Group Plc slid the most in more than three months after Berenberg Bank downgraded the shares.

J Sainsbury Plc rose to a two-year high after posting sales growth that was stronger than estimated.

The FTSE 100 fell 3.81 points, less than 0.1 percent, to 6,454.11 at 2:41 p.m. in London.

The FTSE 100 has still gained 9.5 percent so far this year as US lawmakers agreed on a compromise budget.

The broader FTSE All-Share Index dropped less than 0.1 percent today, while Ireland’s ISEQ Index climbed 1.2 percent.

“The situation in Cyprus remains fluid and uncertain,” said Guy Foster, head of portfolio strategy at Brewin Dolphin Ltd. in London. “The market’s reaction has been muted.

That probably reflects the market’s expectation that Cyprus’s specific circumstances argue are unique and therefore no precedent has been set.”

In the US, housing starts increased to a 917,000 annual rate in February from a revised 910,000 the previous month, according to a Commerce Department release.

Economists in a Bloomberg survey had predicted a 915,000 pace.

Building permits, a proxy for future construction, advanced 4.6 percent to 946,000, the strongest since June 2008.

Deposit Levy

The Cypriot parliament is scheduled to meet at 6 p.m. in Nicosia to debate a rescue package that forces bank depositors to share the cost of the latest euro-zone bailout.

Cypriot President Nicos Anastasiades on March 16 agreed to demands by the currency bloc’s finance ministers to raise 5.8 billion euros ($7.5 billion) by imposing a charge on every bank account in Cyprus.

A vote has been postponed twice over the last two days amid opposition in Cyprus to the proposal.

The bailout package in Cyprus addresses a unique situation in which the size of the country’s banking sector dwarfs its economy, according to a European Union spokesman.

“We need to be very clear that the disproportionate size of the Cypriot bank sector in relation to the Cypriot economy and the nature of its liabilities make this an entirely unique situation with absolutely no parallels elsewhere in the euro area or the European Union today,” Simon O’Connor, spokesman for EU Economic and Monetary Affairs Commissioner Olli Rehn, told reporters in Brussels today.

Iron-Ore Price

Rio Tinto slid 4.5 percent to 3,130 pence, the biggest drop since December 4.

Greg Lilleyman, president of Rio Tinto’s operations in Australia’s Pilbara mining region, said he expects “downward pressure” on iron-ore prices in the second half of the year.

Separately, Goldman Sachs Group Inc. lowered its iron-ore price forecast for the next three years.

The brokerage downgraded the shares of Rio Tinto and BHP Billiton Ltd. BHP, the biggest mining company, dropped 2.7 percent to 1,998 pence.

A gauge of mining companies in the FTSE 350 Index declined to a three-month low. Kazakhmys Plc lost 3.3 percent to 488.8 pence.

Weir retreated 3.4 percent to 2,349 pence, the biggest drop since December 6, after Berenberg lowered its recommendation on the shares to hold from buy.

There isn’t a “significant upside” to Weir’s share price, given its performance so far this year, Berenberg analysts Alexander Virgo and Benjamin Glaeser wrote in a note.

Sainsbury advanced 1.8 percent to 371.9 pence, the highest price since March 2011.

The UK’s third-largest supermarket chain said same-store sales climbed 3.6 percent in the 10 weeks ended March 16.

The revenue, which excluded fuel sales, beat the 2 percent median estimate of analysts in a Bloomberg survey.

Vodafone Group Plc added 1.4 percent to 187.55 pence, its highest price in seven months.

Jefferies Group LLC increased its share-price estimate to 174 pence from 155 pence.

A merger between Vodafone and Verizon Communications Inc. is a possible outcome of talks between the two, analysts led by Jerry Dellis wrote in a note. - Bloomberg News