By Sarah Turner
LONDON (Dow Jones)--FTSE 100 index down 0.4%; Barclays to sell
BGI to BlackRock
Losses from commodity-sector shares and Barclays weighed on the
top British index on Friday as shares closed lower.
The U.K. FTSE 100 index declined 0.4%, or 19.92 points, to
4,441.95. Other European shares were also lower.
The British index has risen roughly 29% since hitting a low of
3,460.71 on March 9, with investors picking up shares amid signs
that the economy could be past the worst point.
Banks have been at the forefront of the recent advance, as they
are perceived to be a key beneficiary of better economic
conditions.
Barclays (BCS) pared some of those gains on Friday, down
4.1%.
The lender said Friday that it has agreed to sell its Barclays
Global Investors fund management unit to BlackRock for $13.5
billion.
Nomura analysts said they are positive on the deal, despite
higher-than-expected initial earnings dilution.
"The sale is likely to strengthen the case that Barclays can
grow or manage its way out of issues around leverage and asset
quality without further equity issuance," they said.
Other banks under pressure included Standard Chartered , down
2.1%.
Mineral extractors and oil producers were under pressure as oil
and gold futures declined. Light sweet crude oil futures fell 96
cents to $1.36 a barrel while gold futures fell $22.90 to $939.00
an ounce.
Of metal stocks, Anglo American shares declined 1.8% and Xstrata
shares lost 1.6%.
Vedanta Resources shares dropped 8.4%. The firm said that it
will issue $1 billion in convertible bonds as it also announced the
acquisition of V.S. Dempo & Co. for around $368 million.
Oil firms trading lower included Tullow Oil , down 2.9%, and
Cairn Energy , down 2.2%.
Citigroup downgraded Cairn Energy to hold from buy as it took a
more conservative view on the stock. "We believe the market has
de-risked some of its previous concerns regarding first oil at
Mangala," the broker said.
Turning to pharmaceuticals, GlaxoSmithKline (GSK) shares rose
5.3%.
GlaxoSmithKline produces influenza vaccine and on Thursday the
World Health Organization declared H1N1 flu a pandemic, the first
official pandemic declaration in 41 years.
AstraZeneca (AZN) shares advanced 4.5% after UBS added the firm
to its key calls, a list of the broker's highest conviction ideas
in Europe.
"We believe five pipeline opportunities could cause more than
100% earnings accretion for consensus 2014 to 2016 forecasts. Just
one blue sky success could lead to AstraZeneca performance for
years to come," the broker said.
De La Rue shares, up 2.7%, extended gains made late Thursday
when it said that it is the preferred bidder to produce U.K.
biometric passports.
The total value of the deal is expected to be around 400 million
pounds over 10 years, the money printing firm said.
Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274