By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) -- Shares of Lloyds Banking Group PLC
gained Monday after a news report that the bank's chief executive
is in line to receive a bonus for topping performance targets,
shaking off a weaker tone seen in London's broader FTSE 100
benchmark.
The FTSE 100 index ended the day down 0.2% at 6,107.86, after
last week hitting levels not seen since 2008. Bourses in Frankfurt
and Paris closed out Monday's session higher.
Lloyds Banking Group rose 1.6%. The Sunday Times reported that
CEO Antonio Horta-Osorio could receive a bonus worth 4 million
pounds ($6.45 million) this year as a result of hitting performance
targets, despite expectations the bank will post a loss.
The prospective 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 mixed, with tech stocks leading the way after
news reports said Apple Inc. (AAPL) cut orders for components used
in its iPhone 5 in reaction to weaker-than-expected global demand
for the smartphone. .
Broker moves commanded much of the London action, with
fund-management company Schroders PLC trading up more than 2.7% to
1,868 pence. Analysts at J.P. Morgan Cazenove raised their price
target to 2,556 pence from 1,882.
Shares of G4S also rose, up 1% to 270 pence after Credit Suisse
raised its rating to outperform from neutral and increased its
target price to 330 pence, up from 275 pence previously.
Miners were also much in the focus for London investors to begin
the week.
Shares of Eurasian Natural Resources Corp. led gainers with a
rise of 3.5% to 334 pence after analysts at Credit Suisse lifted it
to outperform from neutral, raising the target price to 400 pence
from 350 pence as they cited potential re-rating catalysts for
2013.
However, Barclays downgraded the European mining sector to
neutral from positive on Monday, saying the sector's outperformance
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.
Analysts at Barclays 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 London-listed Kazakhmys PLC to underweight from
equalweight, while saying that BHP Billiton now moves to the top of
its rankings over Rio Tinto. Kazakhmys shares fell 2.8%.
Shares of Rio Tinto PLC gained 0.2% as BHP Billiton PLC ended
little changed.
Also on the downside, index heavyweight GlaxoSmithKline PLC fell
0.7%, while telecom heavyweight Vodafone Group PLC lost 0.8%.
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 2% after analysts at
Nomura Securities cut its rating to neutral from buy on
valuation.
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