By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Banks and resource firms led U.K. stocks
lower on Wednesday, tracking a downbeat mood across European
bourses, while shares of United Utilities Group PLC bucked the
trend after the firm reported earnings.
The FTSE 100 index dropped 0.4% to 5,778.81.
Shares of Bunzl PLC dropped 3.7%, after Citigroup cut the
consumer-products firm's price target to £11.90 from
£12.50 to reflect a new earnings forecast.
Resolution Ltd. shares slipped 0.8%, after UBS cut the insurer
to neutral from buy. The analysts said they expect the firm to miss
its 2013 targets.
Bucking the negative trend in London, shares of United Utilities
added 2.5%, after the firm reported a rise in earnings per share
for the six months ended Sept. 30 and said it's on track to meet
its regulatory targets.
Most U.K. stocks were weighed by comments from U.S. Senate
Majority Leader Harry Reid. The Nevada Democrat said late Tuesday
that only little progress has been made in negotiations between
Democrats and Republicans to avert the so-called fiscal cliff,
slated to trigger automatic spending cuts and tax hikes in the new
year.
The negative sentiment was prevalent among resource shares in
London, as both oil prices and metals prices headed south. and
Shares of heavyweight miner BHP Billiton PLC (BHP) dropped 0.8%,
Fresnillo PLC lost 1.1% and shares of Rio Tinto PLC (RIO) tripped
0.6%.
Banks were also on the decline. Shares of Lloyds Banking Group
PLC (LYG) gave up 2.2%, Royal Bank of Scotland Group PLC (RBS) fell
1.4% and sector heavyweight HSBC Holdings PLC (HBC) lost 0.4%.
Shares of Smith & Nephew PLC (SNN) gave up 0.9%. The health
care firm said it agreed to buy the assets of Healthpoint
Biotherapeutics, a wound-care-treatment developer, for $782 million
in cash.
Shares of Marks & Spencer Group PLC added 2.4%, after the
firm agreed on a 10-year funding plan with its pension
trustees.
ARM Holdings PLC shares (ARMHY) added 0.9% to £7.65 a
share, as Barclays lifted the chip maker's target price to
£8.20 from £7.50.
"We continue to view ARM as one of the best positioned shares
globally when it comes to smartphone and tablet growth," the
analysts said.
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