By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks were slammed Wednesday,
driving the FTSE 100 benchmark close to correction territory as
worries about slowing global growth shook up equities throughout
Europe and on Wall Street.
Shire PLC stood out as the FTSE's biggest loser, as its shares
plunged after U.S. drug maker AbbVie Inc. indicated it's
reconsidering a plan to acquire the biopharmaceutical firm.
Investors also assessed U.K. labor-market data released
Wednesday, which showed unemployment falling to its lowest level
since 2008.
The Office for National Statistics said the unemployment rate
between June to August fell to 6%, compared with the 6.1% reading
anticipated by economists. Average weekly earnings including
bonuses rose 0.7% annually, and increased by 0.9% excluding
bonuses. But the growth lags inflation, which stood at 1.2% in
September, so real wages are still declining.
Markets: The FTSE 100 fell 2.8% to 6,211.64, the lowest finish
since late June 2013, according to FactSet data. The FTSE has
fallen 9.7% from its 2014 closing high that was hit in May,
bordering a correction, defined as a drop of 10% or more.
The benchmark's loss accelerated as trading began on Wall
Street, where stocks sank after the release of three downbeat
reports about the U.S. economy. European stocks tumbled further
after Wall Street's open, putting the Stoxx Europe 600 down 11%
from its 2014 closing high.
On the currency side, the pound (GBPUSD) briefly rose then fell
after the U.K. jobs data, as the Bank of England wants to see wage
growth trending higher before it begins to raise interest rates.
Late Wednesday, sterling was buying $1.5944 compared with $1.5905
late Tuesday.
Shire shares ended 22% lower after AbbVie Inc. (ABBV) signaled
late Tuesday it may be rethinking its planned purchase of Shire
because new tax rules from the U.S. Treasury Department make the
deal less attractive. AbbVie's board will meet next week to discuss
their recommendation to buy Shire.
Other drug makers seen as possible targets for tax inversion
deals finished lower. AstraZeneca PLC (AZN) dropped 3.2% and Smith
& Nephew PLC fell 2.5%.
In other action, shares of Balfour Beatty PLC climbed 5.3% after
the construction services company named Leo Quinn as its chief
executive. He previously served for five years as CEO at defense
technology maker QinetiQ Group PLC . Shares of QinetiQ fell
11.8%.
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