By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) -- Shares of Lloyds Banking Group PLC
jumped Monday after a weekend news report said the bank's chief
executive is in line for a bonus after topping performance targets,
shaking off a weaker tone in London as the broader market followed
Europe and Wall Street slightly lower.
The FTSE 100 index was down 0.2% at 6,109.09, after last week
hitting levels last seen in 2008.
Shares of Lloyds rose 1.9%. The Sunday Times reported that CEO
Antonio Horta-Osorio could receive a 4 million pound ($6.45
million) bonus this year after hitting performance targets, despite
expectations the bank will post a loss.
The payout is tied to targets associated with the bank's share
price, Horta-Osorio's turnaround plan and customer complaints, the
newspaper said.
Meanwhile, the FTSE's close on Friday above the 6,100 level
leaves "a clear path for a significant move higher for the index,
said Mike McCudden, head of derivatives at stockbroker Interactive
Investor in London.
"However, with the old adage, 'when everyone's a buyer it's time
to sell,' one should treat the current trading environment with
caution," he said.
A heavy round of U.S. corporate results beginning later this
week will likely have a hand in setting the London trading tone,
with major banks set to dominate the earnings headlines. .
Wall Street traded lower, with tech stocks leading the way after
news reports said Apple Inc. (AAPL) cut orders for components of
its iPhone 5 in reaction to weaker-than-expected global demand for
the smartphone. .
Broker moves commanded much of the action, with fund management
company Schroders PLC up more than 3% to 1,875 pence after analysts
at J.P. Morgan Cazenove raised their price target to 2,556 pence
from 1,882.
Shares of G4S rose more than 1% to 271 pence after Credit Suisse
lifted the company to outperform from neutral and its target price
to 330 pence from 275 pence.
Miners were also in focus. Shares of Eurasian Natural Resources
Corp. led London's gainers with a rise of 3.2% to 334 pence after
analysts at Credit Suisse lifted it to outperform from neutral,
raising the target price to 400 pence from 350 pence, citing
potential re-rating catalysts for 2013.
Barclays downgraded the European mining sector to neutral from
positive on Monday, saying the outperformance of that sector over
the past six months has been linked to an 83% rise in iron-ore
prices, and now's a good time to reduce weightings. The analysts
cut their 2013 earnings-per-share forecasts for the sector by 7%.
Iron-ore-exposed stocks will fare better, while copper, coal and
precious metals come off worse, they said.
The analysts cut Kazakhmys PLC to underweight from equalweight,
and said BHP Billiton now moves to the top of its rankings over Rio
Tinto. Kazakhmys shares fell 2.4%.
Rio Tinto PLC gave up early gains to trade near unchanged and
BHP Billiton PLC gained 0.1%.
Drug maker GlaxoSmithKline PLC weighed heaviest on the index,
with its shares falling nearly 1%, while telecom heavyweight
Vodafone Group PLC lost 0.6%. Glaxo announced a regulatory
submission to the U.S. Food and Drug Administration for a diabetes
treatment.
Vodafone said it intends to start discussions Tuesday with
unions representing workers in Spain, concerning planned layoffs in
the crisis-hit country. Vodafone has about 4,300 staffers in Spain.
.
Shares of Associated British Foods PLC fell 1.8% after analysts
at Nomura cut it to neutral from buy on valuation.
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