LONDON (MarketWatch) — The top British share index edged lower on Monday, with losses for banks and natural-gas producer BG Group weighing.
Asian Shares Down On Europe Debt Concerns
Asian markets are mostly lower as investors adopt a cautious approach at the start of the week amid continuing concerns about European debt. Dow Jones Newswires’ Mark Cranfield reports.
The FTSE 100 index /quotes/comstock/23i!i:ukx (UK:UKX 5,036, -24.73, -0.49%) declined 0.1% to 5,055.07.
Shares across Europe have been under pressure since the start of the year, with the FTSE 100 index down 6.6% year-to-date, amid worries about debt in the more peripheral areas of Europe.
European equity strategists at Deutsche Bank said “the lack of currency flexibility in the E.U. peripherals makes them an easier target for speculators.”
However, they said attention could turn the fiscal situation of other countries.
“Events in recent weeks in peripheral Europe have made us more confident that the U.K. and the U.S. will eventually face problems of a similar nature,” they added.
Banks have dropped lately and were lower again on Monday, with Lloyds Banking Group /quotes/comstock/23s!a:lloy (UK:LLOY 46.18, -2.14, -4.42%) /quotes/comstock/13i!lyg/quotes/nls/lyg (LYG 3.15, -0.10, -3.08%) shares down 2.4% and Barclays /quotes/comstock/23s!a:barc (UK:BARC 257.80, -11.20, -4.16%) /quotes/comstock/13*!bcs/quotes/nls/bcs (BCS 17.11, +0.09, +0.53%) shares down 1.9%.
BG Group /quotes/comstock/23s!a:bg. (UK:BG. 1,077, -35.00, -3.15%) shares were down 3% after Barclays Capital downgraded the natural-gas producer to equalweight from overweight.
“Given the de-risking theme in global markets, investors may choose to focus on the short-term returns offered by higher-yielding plays in the sector,” the broker said, noting that BG has outperformed its sector by 10% since December.
Still, earnings news helped Randgold Resources /quotes/comstock/23s!e:rrs (UK:RRS 4,390, +181.00, +4.30%) to advance 5.7%.
Fourth-quarter net attributable profit jumped to $32.1 million, from $9.1 million at the same point a year ago, after fiscal-year gold production rose 14%.
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Given the profit increase, the firm said that it’s increasing its annual dividend by 30% to 17 cents per share. Read more on Randgold Resources.
Turning to potential deals and International Power /quotes/comstock/23s!a:ipr (UK:IPR 320.90, +7.00, +2.23%) shares were up 2.4%.
The Independent newspaper reported Monday that France’s GDF Suez /quotes/comstock/24s!e:gsz (FR:GSZ 26.32, +0.10, +0.36%) is mulling a bid for the firm which is expected to include a cash element. Talks between the firms collapsed last month, according to the report.
Meanwhile, Icap /quotes/comstock/23s!e:iap (UK:IAP 299.10, +5.10, +1.73%) shares were up 3.5% after Credit Suisse upgraded the interdealer broker to outperform from neutral, citing valuation following a 30% drop in the share price so far in 2010.
The broker said it had cut its pretax profit forecast for fiscal 2010 by 6% and for fiscal 2011 by 15% following a weak trading update last week, but said the price to earnings multiple for fiscal 2011 “is extremely attractive, given the diversified business, upside on voice margins and the improving quality of earnings.”
Sarah Turner is a markets reporter for MarketWatch in London.
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