* FTSE down 0.4 pct in early session trading
* Fall in Glaxo takes most points off FTSE 100 index
* Global stock markets also hit by Fed rate guidance
By Sudip Kar-Gupta
LONDON, March 20 Britain's top equity index fell
on Thursday, hit by a drop in drugs group GlaxoSmithKline and a
slide in global stock markets after the U.S. Federal Reserve
hinted interest rates could rise earlier than expected.
The blue-chip FTSE 100 index, which rose 14.4
percent in 2013 and came close to a 13-year high in January, was
down by 0.4 percent, or 28.95 points, at 6,544.18 points in
early session trade.
A 1.2 percent fall in GlaxoSmithKline took the most
points off the FTSE 100, after an experimental cancer vaccine
from Glaxo failed in a second test.
The findings showed that Glaxo's MAGE-A3 therapeutic vaccine
did not help patients with non-small cell lung cancer in a
late-stage Phase III study.
"With a further read-out pending, we are not pinning much
hope on the product," said Panmure Gordon analyst Savvas
Neophytou, who kept a 'hold' rating on Glaxo's shares.
Global stocks were also hit after Federal Reserve head Janet
Yellen said late on Wednesday that the U.S. central bank would
probably end its massive bond-buying programme this autumn, and
could start raising interest rates around six months later.
The FTSE's latest dip pushed the index close to its lowest
level since early February, and also sent it below its 200-day
moving average, which currently stands around the 6,580 mark.
Technical traders often use the fact that an index has
fallen below that 200-day moving average level as a sign of
further weakness to come in the near term.
Many traders and analysts expect the FTSE to reach a record
high of 7,000 points later this year as the UK's economic
recovery slowly strengthens.
But some traders were more cautious about the short-term.
Hantec Markets analyst Richard Perry said that if the FTSE
fell below the 6,500 mark, it could then retreat further to last
month's lows of around 6,417 points.
"If that 6,500 level breaks, we'd be looking back to the
lows of February," said Perry.
(Editing by Catherine Evans)