UPDATE 1-FTSE falls, led by Sports Direct and engineers
* FTSE 100 down one percent
* On track for 6th week of losses for first time since 2008
* High U.S. exposure, strong sterling dents performance
* Sports Direct hits retailers, Wood Group dents engineers
By Toni Vorobyova
LONDON, Dec 12 (Reuters) - Britain's FTSE 100 fell on Thursday, heading for its longest run of weekly drops since 2008, led by a sell-off in engineering and retail sectors and rattled by concerns about an imminent scaling back of U.S. stimulus.
Sports Direct led falling stocks, down 12.6 percent in its biggest one-day drop for over two years, after disappointing investors by reaffirming rather than upgrading its full-year targets.
The news hit shares in Britain's biggest sporting goods retailer, which had been among the most expensive in the FTSE 100 - trading on 30 times current earnings, compared with the index average price/earnings (P/E) ratio of around 16.
"There was quite a lot of outperformance in the first half and management have suggested that trading has reverted back to its original expectations," said Guy Stephens, managing director at investment managers Rowan Dartington Signature.
"It's a bit of a reality check, but we don't see it as anything more than that ... We see that as an entry point if you can swallow the P/E."
Also among the top losers, engineers Amec and Petrofac sold off after a profit warning from mid-cap peer Wood Group.
"That whole sector is really suffering ... The big oil companies are starting to focus back on their return on equity and reducing capex in certain areas, so ... the people that are suffering are those that feed off those big companies," said Paul Kavanagh, partner at Killik & Co.
"When Wood Group are guiding 15 percent lower, there is scope for further earnings disappointment in the sector."
Shares in Wood Group dropped 10.8 percent, while Amec and Petrofac were down 5.0 and 4.0 percent, respectively.
The weakness in engineers and retailers meant the FTSE 100 lagged behind its European peers, with the British index closing down 62.47 points or 1.0 percent at 6,445.25 points while the euro zone EuroSTOXX 50 lost 0.6 percent.
Sentiment was negative across the board, however, hit by growing expectations the Federal Reserve may start to scale back its equity-friendly stimulus at this month's meeting.
"The market doesn't know - is the tapering going to start, or isn't it? When you get that sort of uncertainty with something so important, that just puts a lid on any further progress," said Stephens at RD Signature.
"At the end of the day, for the market to go up, people have got to buy it, and with people having so much performance this year, they are just squaring positions into the year-end - why take the risk?"
The shift in sentiment has helped take the FTSE's drop for the week so far to 1.6 percent, putting it on track for a sixth consecutive weekly drop for the first time since summer 2008.
The British benchmark - whose companies make around a quarter of their revenues in the United States - has been worse hit than indexes with lower U.S. exposure, such as the German DAX or the French CAC.
The recent weakness of the FTSE has also been exacerbated by the pound, which hit a 2-year high against the dollar this week, eating into the revenues of British exporters.
"FTSE is continuing to struggle to maintain the 6,500 level and this will most likely remain the case as long as sterling stays this strong, which is a significant headwind for the export-led part of the economy," said Lex van Dam, hedge fund manager at Hampstead Capital.