Drugmakers led Britain's top share index lower early on Tuesday, after AstraZeneca
AstraZeneca, down 2.8 percent, said it will take a $381.5 million (246 million pound) pretax charge in the fourth quarter following a double blow to its new drug pipeline. Its core earnings per share, which exclude certain items, would now be in the lower half of the previously indicated range of $7.20 to $7.40, the drugmaker said.
Drugmakers are among a batch of defensive stocks that have outperformed the broader FTSE 100 <.FTSE> in the year to date as investors have sought shelter from global economic problems.
London's blue-chip index was down 13.38 points, or 0.3 percent, at 5,351.61 by 8:51 a.m. as concerns surrounding the outlook for the global economy continued to crimp risk appetite.
Deal volumes were anaemic as most investors stayed on the sidelines, keen not to get their fingers burnt at the end of a torrid year that has seen the FTSE 100 fall 9.5 percent on global debt worries.
There was more gloom for investors late on Monday, when European Central Bank President Mario Draghi quashed hopes for more aggressive bond purchases, which traders had hoped would help calm the markets and signal intent that politicians would do whatever it takes to stem contagion.
The risk of contagion grows as European political leaders procrastinate on further austerity measures to support Europe bringing about uncertainty across the globe, Nam Truong, dealer at Capital Spreads, said.
Banks remained under pressure with no end to Europe's debt crisis in sight and regulatory concerns lingering over sector.
UK-listed banks <.FTNMX8350> extended the previous session's falls following the British government's decision to back proposed reforms to the UK banking system, which could cost the banks as much as 8 billion pounds.
These proposals justify our preference for the UK Asian banks over UK domestic banks that are operating in a hawkish regulatory environment with worsening macroeconomic outlook, Nomura said in a note.
UBS said the reforms could cost UK GDP up to 1 billion pounds .
Among the gainers, Aggreko
Mid-cap <.FTMC> SVG Capital SVI.L, the biggest investor in buyout firm Permira, rose 17.8 percent after it unveiled plans to return 170 million pounds to shareholders and said it would start placing money with other private equity groups.
The CBI's December industrial trends report will be released at 11:00 a.m.