UKX FTSE 100 Index

By Carla Mozee, MarketWatch

ITV drops bid for 'Peppa Pig' owner; Glencore falls for second day

U.K. stocks pulled back Thursday, with losses for drugmakers and commodity producers leading the market's benchmark toward a second straight decline.

The FTSE 100 declined 0.4% to 6,809.87.

Earlier, the blue-chip benchmark fell by as much as 0.8% as European equities sold off following an unexpected drop in business sentiment in Germany, Europe's largest economy. Germany's DAX 30 dropped as much as 1.4% after the release of the Ifo survey for August (http://www.marketwatch.com/story/germanys-ifo-index-falls-sharply-missing-views-2016-08-25).

"Germany, as the export powerhouse of Europe, has the most to lose from U.K.'s exit from EU, but the sharp fall in Ifo reading may be more a result of fear rather than reality," said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note.

So far, neither U.K. data nor eurozone preliminary purchasing managers' indexes have shown any material deterioration of demand, he said, noting the euro has "shrugged off the worries" and was headed back toward $1.1300.

The pound bought $1.3200, down from $1.3231 late Wednesday.

The FTSE 100 on Wednesday dropped 0.5% (http://www.marketwatch.com/story/ftse-100-drops-as-glencore-leads-miners-lower-2016-08-24), as Glencore PLC (GLEN.LN) fell following the miner's financial results. (http://www.marketwatch.com/story/glencore-loss-narrows-even-as-revenue-falls-2016-08-24)

Drug stocks dragged down: On Thursday, the health care sector was making the worst showing, hit by a drug pricing backlash in the U.S. after Mylan NV (MYL)substantially raised the price of its EpiPen emergency allergy treatment (http://www.marketwatch.com/story/backlash-grows-against-mylans-epipen-price-hikes-2016-08-24).

The pharma sector was under pressure "after comments from Hillary Clinton last night suggested that the (Democratic presidential) candidate would look to put pressure on drugmakers to cut prices," said Chris Beauchamp, chief market analyst at IG, wrote in a note Thursday.

Mylan on Thursday said it would take "immediate action" to cut costs for its EpiPen (http://www.marketwatch.com/story/mylan-cuts-prices-for-epipens-after-pressure-from-congress-clinton-2016-08-25). Clinton on Wednesday said the price hike was "outrageous," and congressional members wanted an explanation for the price increase.

Drug stocks remained lower, with AstraZeneca PLC (AZN.LN) (AZN.LN) down 1.6% and Hikma Pharmaceuticals PLC (HIK.LN) off 4.2%. Shire PLC (SHPG) (SHPG) shed 2.7% and GlaxoSmithKline PLC (GSK.LN)(GSK.LN) gave up 0.2%.

Read:How Hillary Clinton crushed another rally in biotech (http://www.marketwatch.com/story/how-hillary-clinton-crushed-another-rally-in-biotech-2016-08-24)

Other movers: Shares of ITV PLC (ITV.LN) were up 0.5% after the broadcaster dropped its bid for Entertainment One Ltd (http://www.marketwatch.com/story/itv-withdraws-offer-to-buy-entertainment-one-2016-08-25).(ETO.LN) (ETO.LN), the producer and distributor behind the "Peppa Pig" cartoon franchise. Entertainment One's shares slid 14%, trading at the bottom of the midcap FTSE 250 index .

CRH PLC climbed 2.3% as the building materials supplier raised its interim dividend and said it foresees posting full-year earnings before interest, taxes, depreciation and amortization of more than EUR3 billion. "CRH is another company which (like the rest of us) is uncertain of the medium term effects of Brexit, but has not seen any impact on its business so far," said Jasper Lawler, market analyst at CMC Markets.

Commodities: Glencore shares continued to trade in the red on Thursday, losing 3.7%. Other mining stocks fell as well, with Anglo American PLC (AAL.LN) off 2.3% and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) down 1%.

Commodities priced in U.S. dollars have come under pressure this week as the greenback edged higher against a number of its rivals. That move makes commodities more expensive to buy for holders of other currencies.

"A stronger [U.S. dollar] and lower commodity prices (notably oil hurting energy names, but also copper and iron ore) have dented sentiment although most have since found their feet," said Accendo Markets analysts Mike van Dulken and Augustin Eden in a note to clients.

Read:Here's why copper is sitting out a big rally by industrial metals (http://www.marketwatch.com/story/heres-why-copper-is-sitting-out-a-big-rally-by-industrial-metals-2016-08-24)

"Traction is, nonetheless, rather lacking as investors begin their typical shift to 'wait 'n' see' mode ahead of a speech by Fed Chairwoman Janet Yellen tomorrow. Traders are, as always, hoping to be able to decipher the path for U.S. monetary policy. They may be left wanting. Again," the Accendo analysts said.

Yellen is slated to speak in Jackson Hole, Wyo., at 3 p.m. London time, or 10 a.m. Eastern.

On Thursday, Kansas City Fed President Esther George told Bloomberg it is "time to move" on interest rates (http://www.marketwatch.com/story/wall-street-set-for-losses-as-yellen-speech-draws-closer-2016-08-25). In a separate CNBC interview, she said hikes should be made gradually. George was the lone dissenter in favor of a rate rise (http://www.marketwatch.com/story/fed-appears-more-open-to-september-rate-hike-2016-07-27) at the Fed's July policy meeting.

The Fed will next meet on Sept. 20 and 21.

Read:Fed might hike interest rates despite market objections (http://www.marketwatch.com/story/fed-going-out-to-jackson-hole-to-get-divorce-from-markets-2016-08-23)

(END) Dow Jones Newswires

August 25, 2016 11:06 ET (15:06 GMT)

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