By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks extended losses on Monday
after utility firm National Grid PLC declined on the back of a
broker downgrade and mining firms dropped as metals prices moved
south.
The FTSE 100 index shed 0.6% to 6,557.37, adding to a 0.4% loss
from Friday.
Among notable losers, National Grid PLC dropped 1.5% after UBS
cut the utility firm to neutral from buy, with the analysts saying
it is difficult to identify further drivers to push the stock
higher from current levels.
"We believe National Grid's U.S. turnaround is largely
confirmed, and see no reason to doubt company guidance for 1-3%
U.K. [return on equity] outperformance," the analysts said.
"We also believe National Grid can deliver its real dividend
growth policy, although the company no longer stands out in terms
of yield. National Grid deserves its premium valuation, in our
opinion, although its attractions are now priced in, in our view,"
they added.
Other utility firms were also lower, with SSE PLC down 0.8% and
United Utilities Group PLC 0.4% lower.
Another energy company, Centrica PLC , shed 1.3% after saying it
has decided not to proceed with its new-build gas storage project
at Baird in the U.K.'s North Sea and to put its project at
Caythorpe in East Yorkshire on hold indefinitely.
As a sector, mining firms weighed on the London benchmark as
metals prices dropped across the board. Shares of Randgold
Resources Ltd. gave up 1.2%, Anglo American PLC erased 1.1%, and
Glencore Xstrata PLC (GLCNF) fell 1.1%.
Oil prices moved lower, adding pressure on the U.K.-listed oil
firms. Shares of Tullow Oil PLC lost 2.4%, Royal Dutch Shell PLC
(RDSB) gave up 0.6% and BP PLC (BP) slipped 0.4%.
Banks declined, with Barclays PLC (BCS) dropping 2.6%, Lloyds
Banking Group PLC (LYG) sliding 3.1% and Standard Chartered PLC
giving up 0.5%.
On a more upbeat note, shares of Croda International PLC added
1.8% after Credit Suisse lifted the chemicals firm to outperform
from neutral.
Shares of Aberdeen Asset Management PLC ticked up 0.3% after the
investment firm said underlying pretax profit for the full year is
expected to come in toward the upper end of market forecasts.
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