By Dominic Lau
LONDON, Feb 7 (Reuters) - Britain's leading share index slid
2.6 percent on Thursday, shrugging off an expected Bank of
England interest rate cut as a raft of results disappointed
investors, with GlaxoSmithKline <GSK.L> a significant loser.
GSK, Europe's biggest drugmaker, slumped 7.6 percent after
it warned that 2008 earnings would fall due to sliding sales of
diabetes drug Avandia and more generic competition. For details
please double click on []
Rival AstraZeneca <AZN.L> lost 2.4 percent after Indian
drugmaker Ranbaxy Laboratories <RANB.BO> said it had received
tentative U.S. approval to sell a generic form of Astra's
blockbuster heartburn and ulcer pill Nexium.
The FTSE 100 <> closed down 151.3 points at 5,724.1.
The UK benchmark index has lost 5 percent so far this week and
is down 11 percent for the year.
"The story of today was all about corporate earnings. The
interest rate decision was almost a side show. There was no
surprise at all, largely priced in, largely expected," said
Richard Hunter, head of UK equities at Hargreaves
Lansdown.
"But what had not been expected was the weak numbers from
Glaxo, BT, Rolls-Royce, etc, which obviously put a big question
mark over the strength of potential slowdown based on corporate
earnings," he said.
The Bank of England cut its key interest rate by a quarter
percentage point to 5.25 percent to help shore up the economy
but policymakers remained worries about inflation, dampening
hopes of rapid fire rate cuts. []
The European Central Bank kept euro-zone rates unchanged at
4 percent. Shares in continental Europe also finished lower.
Banks were the standout losers apart from pharmaceuticals.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, HSBC
<HSBA.L>, HBOS <HBOS.L>, Standard Chartered <STAN.L> and Lloyds
TSB <LLOY.L> dropped between 2.1 and 3.6 percent.
Alliance & Leicester <ALLL.L> fell 10 percent after Spanish
bank Santander <SAN.MC> said it has no acquisition plans at the
moment in general and is not considering bidding for the British
lender in particular. []
FLURRY OF RESULTS
BT Group <BT.L> lost 9.8 percent after the biggest UK
fixed-line telecoms provider missed third-quarter revenue
targets as competition in broadband and a drop in quiz show
phone-ins took its toll. Cable & Wireless <CW.L> was down 2.1
percent.
Directories business Yell Group <YELL.L> topped losers, down
more than 15 percent after it said a weakening UK economy had
forced it to cut revenue guidance for its domestic business and
crimped its ability to exploit more flexible pricing
regulations.
Among other companies announcing results, Rolls-Royce <RR.L>
shed 10.2 percent on disappointment the British engine maker
only raised its dividend by a third.
Gas producer BG Group <BG.L> was the top gainer and one of
only eight FTSE 100 to advance, up 3.8 percent after it reported
a 25 percent rise in fourth-quarter net profit.
Smith & Nephew <SN.L> added 1.4 percent after the company,
Europe's biggest medical-device maker, posted a 15 percent rise
in adjusted annual per-share profit.
Miners were also mostly weaker despite the current merger
and acquisition activity within the sector. BHP Billiton <BLT.L>
lost 3.4 percent after its sweetened $147.4 billion bid for
rival Rio Tinto <RIO.L> was rejected late on Wednesday. Rio was
down 3.6 percent.
(Additional reporting by Michael Taylor and Rebekah Curtis;
Editing by Quentin Bryar)
