By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 index fell from a
14-year high on Thursday, with Vodafone dropping after a broker
downgrade and Aviva down after a trading update.
The benchmark index in London fell 0.6% to 6,840.89, after
closing at the highest level since December 1999 on Wednesday.
Dragging the index lower, shares of Vodafone Group PLC (VOD)
gave up 2.3% after Goldman Sachs removed the telecom firm from its
pan-Europe buy list and cut the rating to neutral from buy. The
analysts explained that recent press reports suggest that possible
suitors for Vodafone are looking at other takeover opportunities,
which lowers the M&A potential. The Wall Street Journal
reported earlier in the week that AT&T (T) is close to sealing
a takeover of DirecTV(DTV).
Aviva PLC lost 3.4% after the insurer reported strong
performance in Europe in the first quarter, but a disappointing
U.K. outcome.
Tullow Oil PLC also declined, down 2.6% after the
oil-exploration company gave a disappointing update on its Kenyan
operations.
The U.K. benchmark extended losses in the afternoon, when U.S.
stocks posted sharp declines after some disappointing macroeconomic
reports. Industrial production dropped 0.6% in April in the U.S.,
while home-builder confidence in May dropped to the lowest in a
year.Read: Stock market live blog: S&P 500, Dow hit fresh
session lows after weak housing report
More broadly in Europe, stock markets dropped in most countries
after first-quarter gross domestic product for the euro zone missed
expectations.
On a more upbeat note in London, shares of London Stock Exchange
Group PLC advanced 0.6% after the company lifted its total dividend
payment by 4.4%, and said that it has identified additional cost
savings in relation to the integration of LCH.Clearnet.
Shares of GlaxoSmithKline PLC (GSK) picked up 1% after Morgan
Stanley started coverage of the drug maker with an overweight
rating.
Outside the main U.K. index, shares of Thomas Cook Group PLC
slid 12.6% after the travel operator said a weakness in travel to
Egypt reduced half-year revenue by 131 million pounds ($221.0
million).
Carphone Warehouse Group PLC lost 8.1% after the cellphone
retailer announced an all-share merger with Dixons Retail PLC worth
3 billion pounds ($5 billion). Dixons Retail shares slumped
10.3%.
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