By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Shares of BG Group PLC led the U.K.'s
FTSE 100 index to its lowest closing level in more than five weeks
on Monday after the energy giant issued a profit warning and cut
its output forecasts.
The FTSE 100 index slid 1.7% to close at 6,550.66, marking a
fifth-straight day of losses.
Posting the biggest loss on Monday, shares of BG Group sank 14%
after the energy company warned its oil-and-gas output this year
will be lower than previously forecast partly due to turmoil in
Egypt. The group declared "force majeure" on contracts in Egypt,
because the country's government had not honored BG's share of gas
from fields, leading to high levels of export volumes being
diverted back to the local market.
Heavyweight Vodafone (VOD) gave up 3.9% after AT&T Inc. (T)
said it has no intention of making an offer for the U.K. telecoms
firm, as it responded to recent speculation over a potential deal.
In other Vodafone news, British newspaper The Times reported that
the group has approached the private-equity owners of a Spanish
broadband operator about a potential 7 billion pound ($11.6
billion) offer. A representative from Vodafone declined to comment
on the report.
Among other losers on Monday, shares of EasyJet PLC dropped 2.3%
after HSBC cut the budget airliner to underweight from neutral.
Pearson PLC gave up 3.8% after J.P. Morgan Cazenove cut the
publisher to neutral from overweight. The analysts said they expect
Pearson to have another challenging year and that they prefer Reed
Elsevier PLC , down 1.2%, within the professional publishing
space.
Banks were also lower, with shares of HSBC Holdings PLC (HSBC)
down 1.7% and Barclays PLC (BCS) off 1.1%. Shares of Royal Bank of
Scotland Group PLC (RBS) dropped 2.2% after the bank said it set
aside an additional GBP2.87 billion to cover U.S. litigation and to
repay customers who were missold Payment Protection Insurance.
Outside the main index in London, shares of F&C Asset
Management PLC jumped 24.5% after the company confirmed it has
received an indicative offer from BMO Financial Group at 120 pence
in cash per ordinary share, which it would recommend to
shareholders if a formal bid is made.
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