By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Most U.K. stocks fell on Thursday, with
oil firms and drug makers leading the decline, after rate-hike
signals from U.S. Fed Chairwoman Janet Yellen rattled financial
markets globally.
The FTSE 100 index fell 0.7% to 6,526.977, setting it on track
for the lowest close since early February.
The benchmark, however, came off session lows, with U.S. stocks
recovering some ground lost in Wednesday's session, aided by a
better-than-expected manufacturing-index reading for the
Philadelphia area.
The loss in London tracked a wider downbeat sentiment in Europe
after Yellen late Wednesday indicated a rate hike could come as
soon as the spring of 2015. Speaking after the central bank's
latest policy announcement, Yellen said the Fed may increase rates
about six months after the asset-purchase tapering is done. The
taper of the Fed's bond purchases is expected to end in October or
November, putting the potential first rate hike on course for April
or May of 2015.
The comments sent the greenback higher (DXY), which in turn
added pressure on dollar-denominated commodities such as oil and
metals. Energy firms in London felt the pinch, with shares of BG
Group PLC down 0.9%, BP PLC (BP) off 1.5% and Royal Dutch Shell PLC
(RDSB) 1.4% lower.
Mining firms were also bruised by weaker metals prices. Shares
of Randgold Resources Ltd. and Rio Tinto PLC (RIO) each eased 0.4%
and BHP Billiton PLC (BHP) slipped 0.3%.
Betting firms took a beating in London as well, extending
declines from Wednesday when the U.K. government said it would
raise taxes on betting terminals. Shares of William Hill PLC
dropped 2.7%, while Ladbrokes PLC slid 5.1% outside the main
benchmark.
GlaxoSmithKline PLC (GSK) fell 1.6% after the drug maker said
its cancer drug MAGE-A3 suffered a setback and didn't meet its
primary goal in a trial.
Outside the main index, shares of Mulberry Group PLC advanced
5.2% after the luxury-goods firm said Chief Executive Bruno Guillon
will leave the helm with immediate effect. The resignation comes
after the company issued a profit warning earlier this year.
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