By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks fell Monday, with the main
index unable to withstand renewed pressure from sharply falling
crude prices.
The FTSE 100 reversed a 0.4% rise to fall 0.7% to 6,453.48,
following Friday's 1.1% drop.
Energy stocks were in the red as crude-oil futures continued to
slump following steep cuts by Goldman Sachs of its forecasts for
oil. As U.S. trading opened, losses intensified for the commodity,
with Brent North Sea crude oil for February down 4.6% to below $48
a barrel, and West Texas Intermediate crude oil for February
delivery (CLG5) down more than 4% to just over $46 a barrel.
Major oil companies BP PLC (BP) and Royal Dutch Shell PLC (RDSB)
fell 1.8% and 2.5%, respectively. Oil producer Tullow Oil PLC gave
up 1.4%, and BG Group PLC (BG) lost nearly 4%.
Meanwhile, shares of home builder Taylor Wimpey PLC fell 1.4%.
The company said in its trading update that it enters the new year
with a "record" order book that has risen in value by 12%, driven
largely from private reservations. The company also said for 2015
is beginning with "a lower rate of price growth" that should foster
a more sustainable housing market.
On the upside, engineering group GKN was high on the gainers
list, rising 1.8% after Credit Suisse said opportunities from its
automotive operations "offer potential to deliver upside surprise"
to consensus estimates for a measure of GKN's earnings,
particularly in fiscal year 2016. The price target was raised to
GBP4.10 ($6.20) from GBP3.80.
Shares of Associated British Foods rose 0.4% as Credit Suisse
also pushed up its price target on the parent company of apparel
retailer Primark to GBP32.50 from GBP30 ahead of the company's
sales update on Thursday.
With Primark sales set to grow and ABF's sugar business "no
longer the drag, we see double-digit EPS growth over the medium
term," said Credit Suisse analyst Charlie Mills in a note. Earnings
may grow about 15% in the 2015/16 year as ABF enters the U.S.
market and sugar recovers somewhat. Primark is slated to open its
first U.S. store this year in Boston.
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