By Carla Mozee, MarketWatch Japan GDP shock follows weak
eurozone growth
LONDON (MarketWatch) -- U.K. stocks pulled back Monday, losing
ground alongside other global markets after Japan's economy -- the
third-largest in the world -- unexpectedly fell into recession.
The FTSE 100 lost 0.2% to 6,643.09, with the trading week
starting on negative footing after Japan said real gross domestic
product shrank 1.6% in the third quarter, as companies cut
inventories and capital investment was subdued. None of the 18
economists surveyed by The Wall Street Journal had forecast
Japanese contraction.
European stocks also fell after Japan's Nikkei Stock Average
slumped 3% following the dour GDP update. In London, shares of
Asia-focused Standard Chartered PLC fell 2.4%, and HSBC Holdings
PLC (HSBC) moved down 1.1%.
News of contraction in Japan comes just days after the release
of lackluster growth data from the eurozone, the U.K.'s largest
trading partner.
Also trading lower was engineering firm Weir Group PLC , whose
business includes work in the oil-and-gas market. The shares were
shot down 3.6% following a rating downgrade to underperform from
outperform at Exane BNP Paribas, with analysts saying the weakness
in oil prices could result in a 25% cut in rig count.
But an upgrade of ARM Holdings PLC at Exane to outperform sent
shares of the chip designer up by 2%.
Meanwhile, AstraZeneca PLC fell 2% after U.S. drug maker Pfizer
Inc. (PFE) said it's teaming up with Germany's Merck KGaA to
develop an anti-cancer tumor treatment. Pfizer will make an upfront
payment of $850 million to Merck as part of the deal, leading
Pfizer (PFE) to cut its 2014 earnings forecast.
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