LONDON MARKETS: FTSE 100 Slumps More Than 1%, With Oil Shares In The Red

By Carla Mozee, MarketWatch

Lloyds down 3% on ratings downgrade

U.K. stocks dropped Monday, with the week starting off with energy shares under pressure as oil producers gather for industry talks this week.

The FTSE 100 index fell 1.2% to 6,828.80. The index on Friday (http://www.marketwatch.com/story/uk-stocks-pull-back-led-lower-by-drops-for-miners-2016-09-23) ended down less than 0.1%. But it ended last week higher by 3%, the biggest weekly advance since the week ended July 1.

Oil shares across Europe were in the red Monday, as both members in and outside of the Organization of the Petroleum Exporting Countries were meeting this week in Algiers at the International Energy Forum. Investors will watch for any news that producers will agree to curb oil output at a time the market is grappling with an oil glut.

Oil major BP PLC (BP.LN) (BP.LN) fell 1.7% and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) lost 1.6% as oil prices pared gains.

"We remain skeptical that an agreement will be reached this week," said Charalambos Pissouros, senior analyst at IronFX Global, in a note.

"After all, the conflict between Saudi Arabia and Iran was the reason that a freeze was rejected in Doha. Even if participants manage to reach consensus this time, OPEC may need to hold an extraordinary meeting to discuss further details before a deal is reached, according to recent headlines," he added.

Other movers: Tesco PLC (TSCO.LN) was down 1.5% following a Telegraph newspaper report (http://www.telegraph.co.uk/business/2016/09/24/tesco-setback-as-pension-black-hole-balloons-to-5bn/) that the supermarket chain's pension deficit has doubled to more than GBP5 billion ($6.4 billion) over the past year, which could result in the delay of reinstating dividend payments.

Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) shares dropped 3.1% following a ratings downgrade to sell from neutral at Goldman Sachs.

WPP PLC (WPP.LN) moved 1.2% lower after Jefferies downgraded the advertising agency's rating to hold from buy, saying "WPP positives are priced in."

Carnival PLC shares (CCL.LN) were off 1.4% ahead of the release of the cruise operator's financial results.

(END) Dow Jones Newswires

September 26, 2016 04:24 ET (08:24 GMT)

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