By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks seesawed Tuesday, as shares
in BP PLC and other FTSE 100 companies reacted to analyst
downgrades.
Meanwhile, the pound wrestled with weakness after official data
showed consumer prices in the U.K. were flat last month.
The FTSE 100 has swayed between minor gains and losses, most
recently rising 2 points to 7,066.55, with only the mining sector
edging higher. Miners were driven lower in the previous session
after downgrades of the iron-ore sector and weak data from China, a
key buyer of metals.
Shares of BHP Billiton PLC (BHP) and Rio Tinto PLC (RIO) , , the
largest iron-ore producers, were each up 1.7%. The companies were
downgraded by Citigroup on Monday, and Standard & Poor's put
their credit ratings on watch for possible downgrade
The FTSE 100 was weighed in part by declines in shares of BP PLC
(BP), Aberdeen Asset Management PLC and Associated British Foods
PLC .
BP was off 0.3% as Citigroup cut its rating on the energy major
to neutral from buy.
But Aberdeen shares dropped the most among blue-chips, falling
1.1% after RBC Capital Markets cut the company to underperform from
sector perform, lowered its price target by 4% to GBP4.55 and
reduced per-share earnings forecasts. RBC said the moves come as
they "expect an acceleration in equity net outflows," in the three
months to March. They estimated those outflows have more than
doubled to GBP1.9 billion from GBP900 million. Aberdeen's fiscal
2015 results are due May 5.
Associated British Foods fell 1% as Jefferies said it's cutting
its mid-term estimates on the company by 5% to 8% to reflect
"further currency headwinds" since its late January downgrades on
Primark and sugar gross margins. It also cut ABF's price target to
GBP28.50 from GBP29.
Sterling: The pound (GBPUSD) was trading at $1.4650, recovering
from an intraday low of $1.4603 it reached after the Office for
National Statistics said consumer prices in the U.K. were flat in
March
(http://www.marketwatch.com/story/uk-consumer-prices-stay-flat-in-march-2015-04-14-4485508)
from the year-earlier period. The inflation rate came in at 0.0%,
unchanged from February.
"Although this was widely expected, other measures of inflation
were mostly weaker than anticipated, causing the pound to slide as
speculators pushed their Bank of England rate hike expectations
further out," wrote Fawad Razaqzada, technical analyst at
Forex.com, in a note.
The core CPI was just 1%, the lowest level since July 2006.
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