By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks fell Monday, with a pullback
in resource shares weighing on the benchmark FTSE 100 as it hovered
near 15-year highs.
The FTSE 100 shed 0.1% at 6,936.75, easing back alongside a
broader downturn in European stocks as they also traded at
multiyear highs. On Friday
(http://www.marketwatch.com/story/iag-climbs-in-london-ftse-100-heads-toward-monthly-gain-2015-02-27),
the FTSE 100 marked a 3.2% advance in February, during which it
also hit its strongest closing level since December 1999.
The FTSE 100 on Monday was dragged lower as the energy sector
lost more than 1%, and as mining stocks swung to losses.
Tullow Oil PLC had the worst performance as shares stumbled
7.8%, with speculation swirling that the fall in the oil producer's
market capitalization will cost Tullow its place on the FTSE
100.
"It looks like the 50% decline in the oil price is coming home
to roost for Tullow Oil, after reporting its first loss in 15 years
for 2014," wrote Kathleen Brooks, research director, at Forex.com,
in a Monday note. In February, Tullow said it swung to a yearly
loss of $1.55 billion and that, for the first time, it would
suspend its dividend.
Brooks said Tullow may be the smallest of the blue-chip index's
five energy companies, but the roughly 60% drop in its share price
since last May has weighed on the sector and the FTSE 100, whose
performance over the past 12 months has experienced sharp declines.
The energy sector accounts for about 15% of the FTSE 100.
Hikma Pharmaceuticals PLC was expected to take Tullow's place in
the FTSE 100, according to reports. Hikma shares rose 0.1% on
Monday. A review of all FTSE indexes will run through March 6, and
changes would be effective at the close on Friday, March 20, with
trading to follow on March 23, FTSE said in a statement Friday.
Oil stocks remained lower Monday as oil prices spent much of the
European session lower. Read more in Futures Movers.
(http://www.marketwatch.com/story/oil-slides-after-posting-strong-february-gains-2015-03-02)Shares
of oil major Royal Dutch Shell PLC fell 2.1%, BG Group PLC fell 1%
and BP PLC gave up 0.3%.
Meanwhile, mining shares lost steam on Monday. They had advanced
after HSBC data showed activity in China's manufacturing sector was
stronger than initially indicated. China is a major buyer of
metals. Shares of Randgold Resources fell 1.5%, Anglo American PLC
fell 0.7% and Fresnillo PLC lost 1.2%. Glencore PLC shares,
however, held to a 0.1% gain ahead of the release of the mining
firm's annual results on Tuesday.
HSBC's China Manufacturing Purchasing Managers' Index rose above
the level of expansion to a final reading of 50.7, up from 49.7 in
January. Also over the weekend, China's central bank cut interest
rates
(http://www.marketwatch.com/story/china-rate-cut-renews-economic-concerns-2015-03-01-164852040),
a move aimed at combating a the country's sluggish economy.
Among advancers, Intertek Group PLC rose 1.3%. The
testing-services company raised its full-year dividend
(http://www.marketwatch.com/story/intertek-yearly-profit-falls-raises-dividend-2015-03-02)
by 6.7% to 49.1 pence a share, although its full-year revenue and
profit fell against a backdrop of tough conditions in the oil, gas
and minerals sectors.
Barclays PLC shares rose 2.3% ahead of Tuesday's release of the
banking heavyweight's full-year results. Royal Bank of Scotland PLC
shares rose 2.8%, topping the FTSE 100.
Elsewhere, the British pound (GBPUSD) rose briefly after Markit
data showed the U.K. manufacturing purchasing manager's index in
February rose to 54.1, a seventh-month high and above a FactSet-
compiled projection of 53.2. But the pound eventually lost steam
against the dollar, buying $1.5361 compared with $1.5436 late
Friday in New York.
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