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
clothing firms advanced after a broker upgrade.
The FTSE 100 index dropped 0.9% to 6,304.47, dropping from the
highest closing level since May 2008 reached on Wednesday,
Shares of Vodafone (VOD) dropped 1.3%, 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 . .
Shares of Barclays PLC (BCS) lost 0.7%, 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 July 2012 lows,"
said Ian Gordon, 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 BARC/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.
Also on the decline in London, Rolls-Royce Holdings PLC slipped
0.9%. Investec moved the company to add from buy, but said it
remains long-term buyers of the stock.
Shares of Rio Tinto PLC (RIO) fell 1.1% 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
metals prices lower. Shares of Kazakhmys PLC lost 0.8%, while Anglo
American PLC fell 0.6%.
On an upbeat note in London, shares of fashion retailer Next PLC
climbed 1.4%, 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 2.9% higher.
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