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* FTSE 100 down 1 pct
* Indivior tumbles 5 pct after patent litigation loss
* Smiths Group down 11 pct
* GSK pulls out of Pfizer consumer health bid
*
By Helen Reid
The FTSE 100 was down 1 percent by 0930 GMT, hittingits lowest level since December 2016 in early trading.
Investors warily eyed the response from
Bank stocks and miners were the biggest drags on the Britishmarket as risk sentiment soured and the most trade-sensitivesectors suffered.
Some felt this was a long-overdue sell-off in stock marketswhich enjoyed an unusually robust 2017 but have run intoobstacles since the start of last month.
"It could have been anything that caused it, it justhappened to be trade," said Daniel Lockyer, senior fund managerat Hawksmoor Investment Management.
"The market is a discounting mechanism and we didn't thinkit was discounting enough risks out there, whether it'scorporate earnings disappointing, political risks, the end ofQE," he added.
Indivior shares plummeted more than 20 percent atthe open before recovering, last trading down 6.5 percent, afterthe pharma firm lost a patent protection case, setting it up forcheap competition to its opioid addiction treatment.
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"Whilst this is disappointing news, given there remainmultiple hurdles before a generic Suboxone film can launch inthe US, we still see the launch of a generic in 2018 asunlikely.
GSK rose 3 percent after it pulled out of thebidding war for Pfizer's consumer health business <PFE.N,>following in the footsteps of Reckitt Benckiser earlier thisweek.
Smiths Group sank 10.2 percent to the bottom of theFTSE 100 after reporting a weaker first-half profit thanexpected. Both profit and revenue fell short of analysts'expectations, with the engineering group pointing to currencyheadwinds and higher R&D costs.
"Delivering the now expected 8 percent organic growth and 70basis points year-on-year margin improvement in the second-halfis key to the investment case going forward, in our view,"analysts at Credit Suisse said.
Double-digit falls in share prices after results have becomea common feature of the
Meanwhile Next jumped 4.6 percent to the top of theFTSE after its annual results, with investors relieved theclothing retailer did not issue a profit warning.
A broadly challenging retail environment has caused many of
Baillie Gifford Japan Trust fell 3.5 percent, whileFidelity China Special Situations tumbled 2.9 percent.Among small-caps Fidelity Japanese Value shares dropped4 percent and Schroder Japan Growth Fund lost 3.8percent.
(Reporting by Helen ReidEditing by Andrew Heavens)