By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Shares of GlaxoSmithKline PLC dropped
sharply Wednesday, keeping a lid on gains for the benchmark FTSE
100 index, after the British drug maker cut its earnings
projection.
Glaxo shares (GSK) fell 5%, the steepest decline since October
2008, according to FactSet data, as the company said it now expects
core per-share earnings to be similar to 2013. That compares with
Glaxo's previous target of 4% to 8% growth.
Glaxo shares led decliners on the FTSE 100 , which edged up 4
points to 6,798.22. The index finished Tuesday's session up 1% at
6,795.34, its highest close in two weeks.
U.K. stocks had nudged slightly higher Wednesday after minutes
from the Bank of England's July meeting showed policy makers
unanimously voted to hold interest rates unchanged.
All nine members of the bank's Monetary Policy Committee voted
to keep the benchmark rate at 0.5% and keep its GBP375
billion-pound ($640 billion) asset-purchase program unchanged. The
decision came at a time when policy makers faced criticism for
sending mixed signals on the outlook of borrowing costs.
"What was perhaps surprising was that the minutes did not
contain any hints from individuals that they were on the brink of
voting for tighter policy," said Investec chief economist Phillip
Shaw in a note.
Investors have been speculating about when the central bank will
make its first rate increase, as the market has recently received a
string of solid economic U.K. data. Several economists have
projected a rate increase in November.
The pound (GBPUSD) slipped following the minutes, buying
$1.7040, compared with $1.7091 ahead of the release.
Elsewhere, shares of BHP Billiton rose 0.4% after the miner
posted iron-ore production of 225 million metric tons for the year
through June. That was an increase of 20% on the 12 months prior.
BHP in April raised its expectations for full-year iron-ore
production to 217 million tons.
Other mining stocks gained as well. Glencore PLC was higher by
0.8% and Rio Tinto PLC (RIO) moved up 1.1%.
European stocks
Meanwhile, the Stoxx Europe 600 index rose 0.1% to 342.94.
Session decliners included Deutsche Bank AG (DB), with shares
losing 0.6%. According to documents reviewed by The Wall Street
Journal, an examination by the Federal Reserve Bank of New York
found that Deutsche Bank's U.S. operations suffer from serious
problems, including shoddy financial reporting, inadequate auditing
and oversight and weak technology systems.
Among national markets, France's CAC 40 index reversed course
and rose 0.4% to 4,388.74, and Germany's DAX 30 index gained 0.3%
to 9,766.43.
Russia's MICEX index turned lower, by 0.5% to 1,398.88. During
afternoon trade, Ukraine's defense ministry said two Ukrainian
fighter jets had been shot down in separatist-controlled eastern
Ukraine.
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