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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