By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks fell Monday, with a ratings
cut for Burberry Group PLC putting the luxury retailer's shares on
their heels as the broader market headed for its biggest decline in
three weeks.
The FTSE 100 fell 1% to 6,632.30, with only three components
moving higher, topped by a 2% rise for British gas parent Centrica
PLC while rival energy company SSE PLC gained 0.3%. Shares of Wm.
Morrison Supermarkets PLC edged up 0.3%.
But Burberry shares fell 2% after they were downgraded to hold
from buy at Berenberg. Currency headwinds persist for euro-, pound-
and Swiss franc-denominated luxury, sporting goods and eyewear
makers, Berenberg analysts John Guy and Bassel Choughari said in a
note Monday. Assuming no change to current levels, "the second half
of 2014 ought to provide some respite. However hedged, the
translational impact is likely to weigh on earnings over the short
term," they said.
U.K. stocks stayed lower Monday after U.S. equity trading opened
with losses. European markets had tracked Wall Street's selloff on
Friday that was underpinned by declines among so-called momentum
stocks, such as biotechs and Internet companies.
Echoing that trend, shares in microchip designer ARM Holdings
PLC fell 2.3% in London on Monday.
One of the surprises for Friday's market action in the U.S. was
that stocks fell "despite the pared-back expectations for U.S.
rates, which would usually be bullish for the market," said
Marshall Gittler, head of global FX strategy at IronFX, to clients
on Monday.
U.K. interest rates, meanwhile, are expected to be held steady
when the Bank of England releases its monetary policy decision on
Thursday.
Also dragging on the FTSE 100 were shares of Barratt
Developments PLC and Hargreaves Lansdown PLC as the home builder
and the investment manager each gave up 4.2%.
While investors shunned both risk and safe-haven stocks on
Monday, risk appetite among chief financial officers of major U.K.
companies was at its highest level in six years in the first
quarter, with a Deloitte survey released Monday showing 71% of CFOs
polled said now is a good time to take on more risk.
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