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Drop in BG Group output fuels FTSE 100's fall UK's top share index dragged down by oil and gas firm announcement that project delays in Egypt and Norway would reduce 2014 production
Energy major BG Group pulled the UK's top share index slightly lower on Monday after the oil and gas firm said project delays would hit 2014 oil output. BG, Britain's 13th largest listed company by market capitalisation, opened down as much as 4 percent and knocked more than 5 points off the FTSE 100. It said delays at projects in Egypt and Norway would reduce its 2014 production by around 30,000 barrels of oil equivalent per day. That contributed to keeping the FTSE 100 in the red, down 8.17 points at 6,539.16, by 0732 GMT having touched three-week highs on Friday. Overall momentum has nonetheless been sluggish as the threat from stimulus withdrawal in the United States and U.S. intervention in Syria remained a drag on sentiment. "After Friday's slightly disappointing non-farm payroll numbers, it is still a waiting game as to the U.S. trimming their bond buying programme," Mark Ward, head of trading at Sanlam Securities said ahead of the next Federal Reserve meeting starting early next week. "Uncertainty over the Syrian situation and Russia's claims that they will assist Syria (has also impacted markets)," he said. Technical analysts said the September recovery persists with ground being made slowly. There is support at 6,520, then 6450, but major resistance at 6660 from the July struggle. Investors are waiting too for a tangible turn up in earnings with the FTSE 100 trading on 13.4 times price-to-earnings, around its long-term average, after the almost consensus bullish call on Europe by investment houses last week. "The concern is over the lack of stabilisation in earnings, so far all the performance was driven by multiple expansion. We believe that current levels of PMIs (purchasing managers' indexes) are already enough for positive earnings per share growth," JP Morgan said in a note. Sweetner-maker Tate & Lyle shed 3.1 percent after UBS downgraded its recommendation on the company to "sell" from "neutral" on valuation grounds. Associated British Foods fell 1.9 percent despite forecasting "good progress" in full year earnings per share after a strong finish to the year from its Primark discount fashion chain, with Shore Capital arguing the firm's valuation still looks full. Preventing the index from falling further were gains from the miners, which added 5 points to the index, boosted by upbeat Chinese trade and inflation data, GDP numbers from Japan and Tokyo winning the right to host the 2020 Olympics, all of which boosted the demand outlook for the sector. http://english.ahram.org.eg/News/81161.aspx
