People walk through the lobby of the London Stock Exchange in London. -Reuters
Britain's top share index retreated from record levels on Monday, weighed down by falling energy stocks and banks. The blue chip FTSE 100 index was down 0.2 percent at 7,410.95 points by 1025 GMT, slipping from 7,447.00 points reached in the previous session, leaving it set to break a three-day winning streak.
Energy stocks were the biggest drag on the large caps, with BP falling 1.1 percent and Royal Dutch Shell down 0.6 percent as oil prices came under pressure from rising U.S. drilling and ongoing high supplies from OPEC. Overall, the energy sector took around 8.4 points off the FTSE 100. Mining stocks also contributed to losses, with Antofagasta, BHP Billiton and Anglo American down between 0.9 and 1.2 percent.
British banks were led lower by Royal Bank of Scotland, which fell 1.6 percent. "The financial stocks have all been on a pretty good push over recent sessions, so we are starting to see some short-term profit-taking come in," Dafydd Davies, partner at Charles Hanover Investments, said. "We could start to see, as Brexit uncertainty builds, a bit more de-risking on the financials that are particularly exposed to the direct state of affairs in question." Last week, British banking shares came under pressure on the prospect of a new Scottish independence referendum and as the trigger of Article 50 came into sight.
Associated British Foods was the top FTSE gainer, however, up 2 percent after Goldman Sachs upgraded the Primark-owner to "buy" from "neutral". "We conclude that Primark's market positioning remains differentiated and, unlike peers, higher input costs are baked into FY17E GM%," analysts at Goldman said, adding that success with a potential Click & Collect model could offer upside.
British mid cap stocks fared slightly better, down just 0.1 percent. Shares in real estate investment trust (REIT) Hansteen Holdings rose 2.6 percent to their highest level since June 2007 after it agreed to sell its German and Dutch industrial property portfolios for 1.28 billion euros ($1.38 billion). "The deal displays the group's strategy at work, and has allowed it to crystallize the revaluation gains and recent currency movement following the depreciation of sterling against the euro," analysts at Patronus Partners said in a note.
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