By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 finished Thursday's
volatile trading session lower, at some point registering a more
than 10% drop from its 2014 high, as part of a flurry of selling
that's hit equity markets world-wide.
The FTSE 100 closed 0.3% lower at 6,195.91. Stocks opened higher
but gains evaporated, pushing the index down by as much as 2.2%,
according to FactSet data. The British benchmark came off intraday
lows as U.S. stocks turned higher after a hawkish Federal Reserve
official, James Bullard, said bond buying should continue beyond
its scheduled end.
At its lowest point on Thursday, the FTSE 100 marked an 11.7%
decline from its high this year, reached in May. The FTSE 100 fell
2.8% on Wednesday, the fall stoked by persistent worries about
slowing global growth. European stocks also fell on Thursday, with
the Stoxx Europe 600 steeped in a correction.
"There's a surplus of negative sentiment in the market ... and
there are a host of things to worry about" including the eventual
end of quantitative easing in the U.S., rough economic conditions
in the eurozone and the spreading outbreak of the deadly Ebola
virus, said Laith Khalaf, senior analyst at Hargreaves Lansdown, in
an interview.
"On the other side of the scales is the fact that valuations of
stocks look reasonable," he said, noting that one long-term
valuation measure, the cyclically adjusted P/E ratio for the U.K.
market, "is cheaper now than it was at the bottom of the market in
2003."
Still-accommodative monetary policy and improved figures within
the U.K.'s latest jobs data are factors that could support the
market, Khalaf said. "There are positive signs there if you want to
find them, but the market is focusing on the negative and that's
just where we are."
The U.K. unemployment rate, released Wednesday, has dropped to
6%, the lowest level since 2008. But lackluster wage growth may
keep the Bank of England from raising interest rates until at least
mid-2015.
Stock movers: Shire PLC was the worst price performer for a
second straight session, losing 7.3%. The board of U.S. drug maker
AbbVie Inc. (ABBV) late Wednesday pulled its recommendation to buy
the British biopharmaceuticals maker. AbbVie on Wednesday said it
is re-evaluating its planned takeover of Shire because new tax
rules from the U.S. Treasury Department make the deal less
attractive.
Tesco PLC fell 1.7% after Warren Buffett's Berkshire Hathaway
(BRKA) reduced its holdings of the supermarket chain, according to
a filing released on Thursday. Berkshire Hathaway now owns less
than 3% of Tesco, down from around 4%, which was the fourth largest
stake in the company. The sale comes after Tesco revealed in
September that it overstated its first-half profit forecast by 250
million pounds ($400 million). Buffett has since said he made a
"huge mistake" by investing in the company.
Holding to gains were shares of Antofagasta PLC . They rose 2%
after UBS raised its rating on the copper miner to neutral from
sell. Engineering group GKN PLC was upgraded to outperform from
neutral at Exane BNP Paribas. Its shares closed up 4.2%.
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