LONDON MARKETS: FTSE 100 Struggles As Reed Elsevier, WPP Fall

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- London markets hugged the flat line on Monday as markets dealt with a clutch of earnings as a busy week for central bank meetings kicked off. Shares of heavyweights Reed Elsevier PLC and WPP PLC both dropped on broker downgrades.

The FTSE 100 index was a shade lower at 6,421.89, underperforming the rest of European markets.

Anglo-Dutch publisher Reed Elsevier PLC took a hit, dropping over 2% after analysts at Citigroup downgraded shares to neutral from buy. The analysts said shares have rallied 53% since July 2012 and 21% year-to-date.

Advertising company WPP was also the subject of a broker downgrade, as HSBC cut shares to neutral from overweight, with analysts saying they see limited scope for further re-rating. It is the first time HSBC has downgraded those shares in three years. Shares of WPP fell nearly 2%.

On the upside in London, shares of Aberdeen Asset Management PLC rose nearly 9% after it said profits and assets under management rose for the half year ended March 31. The company also said, though, that it remains cautious on its outlook.

Lloyds Banking Group PLC (LYG) rose nearly 1% after announcing it will sell its Spanish retail banking operations, including to Banco Sabadell SA , in a cash and stock transaction worth up to EUR104 million ($136 million).

Away from the main index, shares of Balfour Beatty PLC slumped 14% after the international infrastructure group warned its U.K. construction unit will deliver "significantly lower profits from operations for 2013" than management had anticipated in March.

Investors will be focusing on central bank meetings this week, including the U.S. Federal Reserve and the European Central Bank, the latter of which many economists expect to cut interest rates.

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