By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks retreated from a 41/2 year
high on Thursday, as shares of Vodafone Group PLC dropped on
speculation the telecom firm is considering an acquisition, while
weak euro-zone growth data spooked the broader market.
The FTSE 100 index dropped 0.5% to close at 6,327.36, retreating
from its highest closing level since May 2008 reached on
Wednesday.
Shares of Vodafone (VOD) dropped 2.4%, adding to the previous
day's losses when reports said the wireless-telecom firm was
considering a takeover of German cable network operator Kabel
Deutschland Holding AG . .
Shire PLC slumped 5.5%, as it reported a drop in fourth-quarter
operating profit.
Shares of Barclays PLC (BCS) lost 2.2%, after Investec
Securitites cut the bank to hold from buy.
"We believe that, for now, Barclays' shares have arrived. They
have traveled 119% in less than 7 months since the July 2012 lows,"
said Ian Gordon, an analyst at Investec, in a note.
"Although we downgrade Barclays to an absolute hold today, we
continue to expect it to deliver further relative outperformance. A
long Barclays/short Royal Bank of Scotland trade has returned over
15% year-to-date, but we still see further value in such a
position," he said.
News from the euro zone weighed on sentiment in London. Gross
domestic product for the currency bloc fell 0.6% in the fourth
quarter of last year, coming in below analysts' expectations.
Shares of Rio Tinto PLC (RIO) fell 0.3% after the miner swung to
its first full-year loss, hurt by a sharp drop in commodity prices
and an almost $14 billion impairment charge.
Most other mining firms were also under pressure, tracking most
metals prices lower. Shares of Kazakhmys PLC lost 2%, while
Antofagasta PLC slipped 0.5%.
Shares of cruise liner Carnival PLC (CCL) fell 2.9%, after it
late Wednesday said that a fire on one of its cruise ships will
shave off 8 cents to 10 cents of its earnings in the first half of
2013. A fire over the weekend left the Carnival Triumph ship adrift
in the Gulf of Mexico with more than 4,000 people on board.
On an upbeat note in London, shares of fashion retailer Next PLC
climbed 1.2%, after HSBC lifted the stock to overweight from
neutral. The bank further raised its recommendation on online
clothing retailer Asos PLC to overweight from neutral, sending its
shares 1.5% higher.
Outside the main index in London, shares of soft-drinks firm
Britvic PLC sank 7.1% after J.P. Morgan Cazenove cut the stock to
underweight from neutral and Société Générale slashed its
recommendation to sell from buy. On Wednesday, the U.K.'s Office of
Fair Trading referred the proposed merger with A.G. Barr PLC to the
Competition Commission for further investigation.
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