By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- The U.K.'s benchmark stock index
retreated from an almost five-month high on Wednesday, as mining
firms tracked metals prices lower and GlaxoSmithKline PLC fell
after reporting a drop in earnings.
The FTSE 100 index lost 0.3% to close at 6,674.48, breaking a
nine-day winning streak.
Shares of drug maker GlaxoSmithKline (GSK) gave up 1.9% after
the company said net profit fell 12% in the third quarter, as sales
to China were hurt by a high-profile Chinese-government
investigation, alleging the company bribed doctors and others to
sell more drugs.
ARM Holdings PLC (ARMHY) lost 5% after UBS cut the microchip
designer to neutral from buy on valuation.
Mining firms also added pressure in London, as metals prices
dropped across the board. Anglo American PLC fell 3.9%, Antofagasta
PLC dropped 4.3%, Rio Tinto PLC (RIO) gave up 1.3% and BHP Billiton
PLC (BHP) erased 1.4%.
Stocks in London failed to get a boost from an upbeat assessment
from the Bank of England, which lifted its growth forecast for the
second half of the year. The central bank said in minutes from its
policy-setting meeting earlier in October that growth in the second
half would remain around 0.7% a quarter or a little higher,
stronger than expected at the time of the August Inflation Report.
In September, the BOE upgraded the growth expectations for the
third quarter to 0.7% from the 0.5% forecast in August.
The minutes also showed all nine members of the Monetary Policy
Committee voted in favor of keeping the central bank's interest
rates and the asset-purchase program unchanged.
Among other notable movers in the U.K., shares of Royal Bank of
Scotland Group PLC (RBS) dropped 2.7% after Citigroup reiterated
its sell rating on the firm.
Other banks in London were also on the decline, following
European peers lower. The losses in the banking sector on the
continent came as the European Central Bank said it would begin a
thorough review of the balance sheets of 130 financial institutions
in the euro zone in November, to unearth potential risks before
moving closer to a banking union for the region. As part of the
asset-review exercise, the ECB will ask these banks to set aside 8%
of their risk-adjusted capital as a buffer against losses on loans
and other parts of their balance sheets.
Shares of Barclays PLC (BCS) shaved off 1.6%, Standard Chartered
PLC eased 1.5% and HSBC Holdings PLC (HBC) slipped 0.5%.
Shares of Sports Direct International PLC added 0.8% after the
sportswear retailer said sales for the nine weeks to Sept. 29 rose
15% and gross profit climbed 19%.
Outside the main index, Home Retail Group PLC jumped 4.2% after
the do-it-yourself retailer said pretax profit rose 53% in the
first half of the fiscal year.
Bank-note printer De La Rue PLC sank 9.7% after lowering its
full-year operating-profit guidance. The company said "the
continuing overcapacity in the bank-note paper market has led to a
worsening pricing environment in the printed bank-note market."
Premier Oil PLC dropped 3.4% after the oil and gas explorer
lowered its full-year production forecast, blaming gas export
issues in both Vietnam and the U.K.
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