By Carla Mozee, MarketWatch
U.K. stocks lost ground Thursday, as investors awaited a crucial decision from the Federal Reserve on U.S. monetary policy, which could have sweeping implications for markets internationally.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.52% fell 0.7% to 6,186.99, giving back a portion of Wednesday’s 1.5% climb that left the blue-chip index with its strongest percentage gain in about two weeks.
More broadly in Europe, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.90% swung down 0.2% to 321.21. Asian markets ended mixed, with Japanese shares /zigman2/quotes/210597971/delayed JP:NIK +0.14% higher, but Shanghai stocks /zigman2/quotes/210598127/delayed CN:SHCOMP +0.81% lower. U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.48% /zigman2/quotes/210599714/realtime SPX +0.36% on Thursday were largely flat.
The highly anticipated Fed decision “is a very close call, and certainly no binary decision,” said analysts at ING, who outlined five different policy paths the U.S. central bank could take. ING expects the Fed will be sensitive to any market reaction, therefore leave rates at their ultralow level this month, but may hint at an October move.
The Fed decision is due at 7 p.m. London time, or 2 p.m. Eastern Time, and will be followed by a news conference with Fed Chairwoman Janet Yellen.
British blue-chips remained lower while the pound was little changed after the release of the U.K. retail-sales report for August. Sales rose 0.2% compared with zero growth in July. Sales on a year-over-year basis rose 3.7%. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.4208% against the dollar was trading at $1.5502. It bought $1.5493 late Wednesday.
FTSE 100 stocks: Engineering firms Smiths Group PLC /zigman2/quotes/208640940/delayed UK:SMIN +0.92% and Weir Group PLC /zigman2/quotes/201865002/delayed UK:WEIR +1.93% declined 4.2% and 2.6%, respectively. The shares came under pressure as Rotork PLC /zigman2/quotes/200372942/delayed UK:ROR +1.01% , a maker of valve-automation systems for the oil-and-gas and other industries, warned its 2015 revenue and adjusted operating profit will be lower than last year.
Weir, a provider of engineering services to the energy industry, will be exiting the FTSE 100, with shares to begin trading on the midcap FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX +0.22% on Monday.
Shares of Royal Dutch Shell PLC /zigman2/quotes/204253697/delayed UK:RDSB -1.01% lost 1% while BG Group PLC shed 0.1%. Shell‘s planned $70 billion takeover of BG Group hit a snag in Australia, where the antitrust regulator highlighted concerns about domestic supplies of natural gas.
Merlin Entertainments PLC shares narrowed their loss to less than 0.1%. The company said operating profit at its resort theme parks division may continue to be hurt in 2016 by the roller-coaster crash at Britain’s Alton Towers in June.