By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- U.K. stocks fell Friday, pushing it deeper toward a loss for a week in which investors globally fretted about market valuations.

The FTSE 100 fell 1.4% to 6,551.91, with only five stocks able to advance. Wm. Morrison Supermarkets PLC was the best price performer as its shares rose 1.6%. Miner Fresnillo popped up 1.2|% and British gas parent Centrica PLC rose 0.8%

The FTSE is on pace to fall 2.1% for the week, which would be its first decline in four weeks.

U.K. and European stocks this week have been cut down as part of a global slide in equities, set off by worries about valuations in so-called momentum shares, such as biotech and Internet plays. A 3.1% drop in the Nasdaq Composite(RIXF) on Thursday underscored such concerns.

Among London-listed tech shares Friday, chip designer ARM Holdings PLC slumped 5%, and business software maker Sage Group PLC lost 2.3%.

Barclays told clients Friday that while the U.K. market is close to all-time highs, valuations are not.

U.K. stocks have risen 70% since the end of 2008, at the time of the world-wide financial crisis, said Barclays, adding that some see further gains from current levels as being limited. "However, we would argue that the outlook is one in which valuations are either in line or below historical averages, earnings growth only now showing signs of accelerating and corporate activity is likely to increase," said U.K. equity strategist Ian Scott.

Barclays said the FTSE 100 could hit 7,400 by year-end, and suggested that investors overweight financial shares (excluding insurers) as well as the oil, materials and industrial sectors, and be underweight in consumer staples and health care.

Banking stocks were swept lower Friday, with HSBC Holdings PLC reversing course for a loss of 0.5%, Royal Bank of Scotland Group PLC was down 1.9% and Standard Chartered PLC was off 0.3%.

Elsewhere in the banking industry, U.K.'s Co-operative Bank posted a 2013 operating loss of GBP1.28 billion ($2.15 billion) and said it won't make a profit this year or in 2015. The company's planned listing on the London Stock Exchange was also under review, tied in part to ongoing regulatory investigations. Read: European banks still pose global risks.

On the economic front, government data showed construction output fell 2.8% in February compared with the previous month. The decline, tied to a bout of poor weather in the U.K., was the largest since November, said the Office for National Statistics. Builders were lower, with Barratt Developments PLC down 3.4% and Persimmon PLC off 2.1%.

U.K. stocks on Thursday ended a choppy session up 0.1%. Investors this week received, as expected, the Bank of England's decision to hold its key lending rate at a record low of 0.5% and maintain asset purchases at 375 billion pounds ($629 billion).

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