LONDON MARKETS: FTSE 100 Erases Gains, Slides For Third Day

By Sara Sjolin, MarketWatch

LONDON (MarketWatch)--U.K. stocks closed lower on Thursday as initial optimism over dovish minutes from the Federal Reserve was overshadowed by broader worries about the eurozone.

The FTSE 100 index lost 0.8% to close at 6,431.85, marking its third straight day of losses.

The benchmark initially opened with sharp gains after Fed minutes released Wednesday reaffirmed the U.S. central bank's intention to be prudent in raising interest rates. U.S. stocks scored their biggest one-day gains of the year in the wake of the release, but all major benchmarks overseas were in the red on Thursday.

The broader European markets also closed lower, as fears about the current weakness in Germany and the eurozone overshadowed excitement with the Fed. The pan-European Stoxx Europe 600 index lost 0.4% to 326.67, down from trading as high as 331.59 earlier in the day.

In the U.K., focus was also on the Bank of England that left interest at a record low of 0.5% and made no changes to its 375 billion ($607 billion) asset-purchase program.

At the BOE's September meeting, two members voted in favor of a rate hike. Since then, however, U.K. inflation has slipped and economic data have generally weakened, so most of the nine members of the Monetary Policy Committee are widely expected to have voted for no change. The minutes from the October decision will be out on Oct. 22.

Among London market movers, miners posted some of the biggest gains, as a weaker dollar helped drive commodity prices higher. Shares of Randgold Resources Ltd. rallied 6.1%, Fresnillo PLC gained 6.4%, and Antofagasta PLC put on 1.6%.

Royal Mail PLC added 1%. The delivery company reached a settlement agreement with the French competition authority over allegations it had breached antitrust laws in the postal market.

On a more downbeat note, banks posted losses with shares of Barclays PLC (BCS) down 1.5%, HSBC Holdings PLC (HSBC) off 1.4% and Royal Bank of Scotland Group PLC (RBS) 2.1% lower.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires