LONDON MARKETS: Oil Firms, GSK Push FTSE 100 To Six-week Low

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Most U.K. stocks fell on Thursday, with oil firms and drug makers leading the decline, after rate-hike signals from U.S. Fed Chairwoman Janet Yellen rattled financial markets globally.

The FTSE 100 index fell 0.7% to 6,526.977, setting it on track for the lowest close since early February.

The benchmark, however, came off session lows, with U.S. stocks recovering some ground lost in Wednesday's session, aided by a better-than-expected manufacturing-index reading for the Philadelphia area.

The loss in London tracked a wider downbeat sentiment in Europe after Yellen late Wednesday indicated a rate hike could come as soon as the spring of 2015. Speaking after the central bank's latest policy announcement, Yellen said the Fed may increase rates about six months after the asset-purchase tapering is done. The taper of the Fed's bond purchases is expected to end in October or November, putting the potential first rate hike on course for April or May of 2015.

The comments sent the greenback higher (DXY), which in turn added pressure on dollar-denominated commodities such as oil and metals. Energy firms in London felt the pinch, with shares of BG Group PLC down 0.9%, BP PLC (BP) off 1.5% and Royal Dutch Shell PLC (RDSB) 1.4% lower.

Mining firms were also bruised by weaker metals prices. Shares of Randgold Resources Ltd. and Rio Tinto PLC (RIO) each eased 0.4% and BHP Billiton PLC (BHP) slipped 0.3%.

Betting firms took a beating in London as well, extending declines from Wednesday when the U.K. government said it would raise taxes on betting terminals. Shares of William Hill PLC dropped 2.7%, while Ladbrokes PLC slid 5.1% outside the main benchmark.

GlaxoSmithKline PLC (GSK) fell 1.6% after the drug maker said its cancer drug MAGE-A3 suffered a setback and didn't meet its primary goal in a trial.

Outside the main index, shares of Mulberry Group PLC advanced 5.2% after the luxury-goods firm said Chief Executive Bruno Guillon will leave the helm with immediate effect. The resignation comes after the company issued a profit warning earlier this year.

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