FTSE 100 Watch: BG Output Drop Forecast Weighs on the Footsie

on Sep 9, 2013
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iNVEZZ.com, Monday, September 9th: UK oil and gas company BG Group dragged Britain’s blue-chip index lower on Monday after the energy giant warned that project delays would impact its output next year. The news outweighed upbeat trading data from China which propped up miners and prevented a steeper decline in the Footsie.

**BG Group Pulls FTSE 100 Lower**
The FTSE 100 Index shed 0.4 percent, to 6,522.33 as of 11:26 BST, dragged down by BG Group, which plunged 4.8 percent to 1,220p, the stock’s biggest drop since November 2012. The UK oil and gas company said that its 2014 production would be reduced by 30,000 barrels a day next year as a result of unrest in Egypt, project delays in Norway, and lower natural gas prices in the US. As of 12:38 BST, BG Group’s shares were trading at 1,220.82, or 4.77 percent lower.

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“Investors are very sensitive to changes in guidance from BG,” Guy Foster, a portfolio strategist at Brewin Dolphin Ltd, told Bloomberg. “They have reiterated their guidance for 2013, which ought to be reassuring, but right now, it’s natural for investors to look for cracks in their production forecasts,” he added.

Sweetener producer Tate & Lyle shed 3.53 percent to trade at 778.50p as of 12:36 BST after UBS downgraded the stock from neutral to sell, explaining that the shares were too expensive and did not sufficiently reflect the risks of a decrease in sucralose prices.
Associated British Foods dropped 2.16 percent to 1,811.00p. As Reuters reported, the company fell despite forecasting “good progress” in full year earnings per share after a strong finish to the year from its Primark discount fashion chain, with investment group Shore Capital arguing that the company’s valuation still looked full.

**Miners Advance**
Among the Footsie gainers today were miners which were supported by data showing that China’s exports jumped 7.2 percent last month as compared with a year earlier. As Reuters reported, Japan’s revised GDP numbers and Tokyo winning the right to host the Summer Olympics in 2020 were also seen as supporting the demand outlook for the sector. Silver miner Fresnillo jumped 3.01 percent to trade at 1,302.00p as of 13:00 BST, while Rio Tinto rose 0.74 percent to 3,120.00p. Anglo American was 0.35 percent up at 1,586.50p.

!m[Miners Boosted by China Export Data](/uploads/story/5347/thumbs/pic1_inline.gif)
Burberry Group advanced 2.19 percent to trade at 1,635.00p. As Bloomberg reported, the UK luxury goods maker rose after HSBC Holdings Plc added the stock to its “Europe Super Ten” list.
“Short term, we are more positive on sales than the consensus and, as a result, expect upgrades to full-year consensus estimates,” Bloomberg quoted HSBC strategists led by Robert Parkes as saying in a note. The strategists added that the company would benefit from its investments in the digital medium, which would give it a long-term competitive advantage over the rest of the industry.

**The FTSE 100 was 0.48 percent lower at 6,515.62 as of 13:17 BST on 09 September 2013.**

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