* FTSE 100 down 0.2 pct, off eight-months peak
* Pearson suffers biggest daily fall in 12 years after
* Weak Chinese data hits mining stocks
By Francesco Canepa
LONDON, Jan 23 Britain's FTSE 100 was on
the back foot on Thursday, weighed down by weak updates from
Easyjet and Pearson and renewed concerns about
economic activity in top metals consumer China.
Shares in Pearson plunged 7.9 percent, their biggest fall in
12 years, after the publisher reported big restructuring charges
alongside weak demand in its education businesses in North
America and Britain.
"We had hoped that things had stabilised and obviously
pressure continued," said Investec analyst Steve Liechti, who
put his estimates, price target and recommendation for the stock
under review after the update.
"There are a lot of structural pressures on the business and
we don't see any sort of mitigation of these pressures
Pearson's stock knocked 3.2 points off the FTSE, which was
down 12.16 points, or 0.2 percent, at 6,814.17 points at 1141
GMT. The index was slipping further away from an eight-months
high of 6,867 points hit on Tuesday.
Easyjet was also among the top fallers, off 2.6 percent
after the budget airline guided that first half seasonal losses
would be higher this year than last year due to the timing of
Easter, which falls in its fiscal second half.
"At the minute people are just trying to get out. Some of
the longer term players are taking profits (on Easyjet)," said
Vinay Sharma, trader at Gekko Global Markets.
"Usually we do see some flow in terms of clients looking for
value but I haven't seen this morning as of yet."
Basic materials knocked a further 2.1 points off the FTSE as
data showed activity in China's factory sector contracted in
January for the first time in six months, according to the
Markit/HSBC PMI, pointing to a weak start in 2014.
On the upside, though, there were some signs of strength in
Europe, with the equivalent surveys showing growth slowing less
than expected in France and activity picking up in Germany.
The weak corporate updates and mixed macro data fuelled
investor concern about the strength of 2013 earnings at a time
when analysts say profit growth is key to driving any further
gains in equity markets.
On average, FTSE 100 companies' earnings are seen missing
the consensus by 1 percent, according to StarMine
SmartEstimates, which track the up-to-date forecasts of the most
Companies in the broader STOXX Europe 600 are seen
falling short of consensus by 0.8 percent.
Robert Quinn, chief European equity strategist at S&P
Capital IQ, said he preferred continental European indexes to
the FTSE in light of the latter's larger weighting in basic
materials, energy and consumer staples stocks. All of those
sectors are expected to suffer from an ongoing economic slowdown
in emerging markets.