By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- London stocks struggled to find any
footing Wednesday, after the minutes from the latest Bank of
England's monetary policy committee revealed some concern about the
durability of the economic recovery in the U.K.
The FTSE 100 index fell 0.3% to close at 6,681.08, a day after
snapping a three-day winning streak.
Investors were distracted by a heavy dose of U.S. data, while
minutes of the Federal Open Market Committee's October meeting will
be released after the close of London trading. Closer to home,
minutes of the BOE's November policy-setting meeting showed a
unanimous vote to keep the central bank's interest rates on hold
and the asset-purchasing buying program unchanged.
But members expressed uncertainty over the "durability of the
recovery and the extent to which supply growth would keep pace with
demand," while it said it sees few inflationary risks.
Chris Williamson, chief economist at Markit, said "if the
current pace of economic growth persists, it seems likely that talk
will veer toward whether it might be appropriate to tighten policy
sooner than currently envisaged by the Bank. All will depend on
whether the UK can sustain the surprisingly strong pace of growth
we have seen in recent months, and the extent to which wages will
pick up alongside economic recovery."
Shares of Royal Mail PLC traded with losses for most of the
session, but ended flat, after UBS initiated a sell rating on the
shares, saying the stock is "priced to perfection," and the market
is overestimating margin upside.
"To get to the upper end of the 5% to 10% regulated range
(assumed by the market; current 3%) would require acceleration of
staff reductions, additional automation and no adverse events,"
said UBS analysts.
Investec analysts said that while the stock may pause for
breath, profits are likely to grow strongly in the medium term.
They initiated coverage with a hold recommendation.
Other decliners included Rexam PLC , off 1.7% and Weir Group PLC
down 1%.
Gainers included Aberdeen Asset Management PLC , up 3.5% after
Bank of America Merrill Lynch reportedly lifted its price target on
the group to 485 pence from 380 pence. Merrill was upbeat after
Aberdeen's deal to buy Scottish Widows Investment Partnerships,
announced on Monday.
Travis Perkins PLC was up 1.3%, while miners such as Rio Tinto
PLC (RIO) . added 1.3%.
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