Centrica slide pulls UK's FTSE from 15-year high
Reuters
Published Feb 19, 2015 12:33
Centrica slide pulls UK's FTSE from 15-year high
By Sudip Kar-Gupta and Alistair Smout
LONDON (Reuters) - Britain's top equity index retreated on Thursday from 15-year highs, with a drop in the share price of utility Centrica weighing on the market.
The blue-chip FTSE 100 index, which had risen to a 15-year high of 6,921.32 points on Wednesday, edged down 3.12 points, or 0.1 percent to 6,894.96 points at 1130 GMT.
Centrica was the worst-performing FTSE 100 stock in percentage terms, dropping by 8.5 percent. Weak energy prices hit Centrica's annual profits and the company also disappointed investors by cutting its dividend hard.
"Centrica is another energy company that is suffering from a low oil price. Also, the fact that they've cut their dividend by such an amount will mean that some investors will now look elsewhere for better yields," said Dafydd Davies, partner at Charles Hanover Investments.
Oil prices tumbled on Thursday as U.S. inventories were expected to hit record highs, which in turn put further pressure on energy stocks such as Tullow Oil and BP.
A dip in BAE Systems (LONDON:BAES) was shortlived, even after the company forecast only a modest rise in earnings for this year.
The defence firm traded flat, and traders said optimism over U.S. military spending next year had helped to pare losses. Aerospace and defence firm Rolls Royce also rose 2.2 percent after a year of underperformance.
Gold miners such as Randgold and Fresnillo (LONDON:FRES) rose on the back of a rally in the gold price. [GOL/]
Investors also remained cautious due to lingering uncertainty over Greece.
Greece formally requested a six-month extension to its euro zone loan agreement on Thursday, offering major concessions as it raced to avoid running out of cash within weeks and overcome resistance from sceptical partners led by Germany.
Optimism over a deal helped to nudge European stock markets into positive territory, and Logic Investments' Ryan Mitchell said any Greek loan deal could lift the FTSE to a record high of 7,000 points.
"I'd still be looking to buy the market on the dip," he said.
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Written By: Reuters
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