By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks slipped into negative
territory on Monday amid ongoing concerns about a possible U.S.
government shutdown and after disappointing Chinese manufacturing
data.
The FTSE 100 index dropped 0.8% to close at 6,462.22, trimming
its monthly gain to 0.8% and its quarterly advance to 4%.
Mining firms pressured the London benchmark, weighed by
weaker-than-expected data from China. The HSBC China Manufacturing
Purchasing Managers' Index for September came in at 50.2, lower
than the preliminary reading of 51.2. Metals firms are sensitive to
growth indications from China, as the country is a major user of
natural resources.
Shares of Glencore Xstrata PLC (GLCNF) lost 2.1%, Rio Tinto PLC
(RIO) dropped 1.4%, Anglo American PLC gave up 1.4% and BHP
Billiton PLC (BHP) fell 1.1%. Metals prices were lower across the
board.
Among other resource firms, shares of BP PLC (BP) erased 1.8% as
the oil giant prepared to go to court in New Orleans on Monday for
the second phase of its trial over the 2010 Deepwater Horizon oil
spill in the Gulf of Mexico.
Other oil firms also declined, tracking oil prices lower. Shares
of BG Group PLC dropped 1%, and Royal Dutch Shell PLC (RDSB)
slipped 0.5%.
More broadly, investors were hesitant to take any big positions
in stocks given the uncertainty over the U.S. budget. The
government could face its first shutdown in 17 years after
lawmakers over the weekend failed to agree on a budget for the new
fiscal year, which starts on Tuesday. If House Republicans and
Senate Democrats cannot agree by a Tuesday morning deadline, many
government offices will close.
Banks, which tend to be among biggest fallers when investors
shun risk, fell. Shares of Royal Bank of Scotland Group PLC (RBS)
dropped 1.8%, Lloyds Banking Group PLC (LYG) lost 0.9%, and
heavyweight HSBC Holdings PLC (HBC) erased 1.2%.
On a more upbeat note, shares of Persimmon PLC gained 2.4% after
J.P. Morgan Cazenove lifted its view on the home builder to
overweight from neutral. The analysts said they "continue to see
scope for Persimmon to beat on expectations around the timing of
its cash-return program."
In the same vein, shares of Shire PLC rose 0.5% after J.P.
Morgan Cazenove lifted the pharmaceutical firm to overweight from
neutral.
Shares of William Hill PLC added 0.3% after Deutsche Bank raised
the bookmaker to buy from hold.
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