By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Most U.K. stocks slipped into negative
territory on Monday amid ongoing concerns about a government
shutdown in the U.S. and after disappointing Chinese manufacturing
data.
The FTSE 100 index dropped 0.8% to 6,458.04, on track for the
lowest close in September.
Mining firms added the most pressure on the London benchmark,
weighed by weaker-than-expected data from China. The HSBC China
Manufacturing Purchasing Managers' Index for September came in at
50.2, lower than the preliminary reading of 51.2. Metals firms are
sensitive to growth indications from China, as the country is a
major user of natural resources.
Shares of Glencore Xstrata PLC (GLCNF) lost 2.5%, Rio Tinto PLC
(RIO) dropped 2.4%, Anglo American PLC gave up 2.3% and BHP
Billiton PLC (BHP) fell 1.4%. Metals prices were also mostly
lower.
Among other resource firms, shares of BP PLC (BP) erased 1% as
the oil giant prepared to go to court in New Orleans on Monday for
the second phase of its trial over the 2010 Deepwater Horizon oil
spill in the Gulf of Mexico.
Other oil firms were also on the decline, tracking oil prices
lower. Shares of BG Group PLC dropped 1.1%, and Royal Dutch Shell
PLC (RDSB) slipped 0.4%.
More broadly, investors were hesitant to place any big positions
in the stock markets as uncertainty over the U.S. budget lingered.
The government could face its first shutdown in 17 years after
lawmakers over the weekend failed to agree on a budget for the new
fiscal year, which starts on Tuesday, Oct. 1. If House Republicans
and Senate Democrats cannot agree by a Tuesday morning deadline,
thousands of government employees will be unable to work.
Banks, which tend to be among biggest fallers when investors
shun risk, were on the decline. Shares of Royal Bank of Scotland
Group PLC (RBS) dropped 2.3%, Lloyds Banking Group PLC (LYG) lost
1.2%, and heavyweight HSBC Holdings PLC (HBC) eased 1.2%.
On a more upbeat note, shares of Persimmon PLC gained 2.3% after
J.P. Morgan Cazenove lifted the home builder to overweight from
neutral. The analysts said they "continue to see scope for
Persimmon to beat on expectations around the timing of its
cash-return program."
In the same vein, shares of William Hill PLC added 0.7% after
Deutsche Bank raised the bookmaker to buy from hold.
Shares of Shire PLC climbed 0.7% after J.P. Morgan Cazenove
lifted the pharmaceutical firm to overweight from neutral.
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