U.K. stocks dropped, posting the biggest weekly decline since June, amid a slump in emerging-market currencies.
Aberdeen Asset Management Plc, Scotland’s largest money manager, lost 5.7 percent after Morgan Stanley downgraded the shares. Standard Chartered Plc and HSBC Holdings Plc each dropped at least 2 percent as a gauge of banking stocks in the Stoxx Europe 600 Index retreated the most since August.
The FTSE 100 fell 109.54 points, or 1.6 percent, to 6,663.74 at the close of trading in London, bringing its drop for the week to 2.4 percent after two consecutive weekly gains. The broader FTSE All-Share Index lost 1.6 percent today, and Ireland’s ISEQ Index declined 2.1 percent.
“International factors are impacting on the U.K. market as we see a renewed rout across emerging economies,” Jeremy Batstone-Carr, head of research at Charles Stanley & Co. in London, said in a telephone interview. “Investors look to be taking some risk off the table.”
The FTSE 100 rallied 14 percent last year, with its valuation reaching a four-year high. The gauge trades at 13 times the projected earnings of its members, compared with the five-year average of 11.5, according to data compiled by Bloomberg. The FTSE 100 ended 2013 with a valuation of 14.1.
“Equity markets have performed fantastically well in the weeks surrounding the turn of the year,” Marc Kimsey, a trader at Accendo Markets Ltd. in London, wrote in an e-mail. “This latest contraction and subsequent profit-taking should be welcomed as an opportunity to take advantage of discounted prices.”
Aberdeen dropped 5.7 percent to 397.3 pence after Morgan Stanley downgraded the shares to underweight from equal weight, meaning investors should sell the stock. The brokerage cited worsening fund performance and challenging emerging-market fundamentals. The MSCI Emerging Markets Index lost 1.4 percent today, heading for its biggest weekly loss since November.
Standard Chartered, which got almost three-quarters of its earnings from Asia in 2012, retreated 2.6 percent to 1,309.5 pence. HSBC, Europe’s biggest bank by market value, fell 2 percent to 645.9 pence.
Fresnillo Plc, a producer of gold and silver, advanced 1.5 percent to 792 pence. Randgold Resources Ltd. climbed 1.1 percent to 4,233 pence. Gold futures headed for the longest run of weekly gains since September 2012.