LONDON MARKETS: BG Leads FTSE 100 To Five-week Low After Profit Warning

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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