By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- The U.K.'s benchmark FTSE 100 sagged
Monday, with Intertek Group PLC struggling after a ratings
downgrade, and Rolls-Royce Holdings PLC slipping after its name
cropped up in a corporate scandal that's been rocking Brazil.
The FTSE 100 fell 0.2% to 6,858.52, echoing a cautious tone
across European equity markets ahead of a key meeting on the Greek
debt situation. The Eurogroup eurozone finance ministers will meet
in Brussels later Monday to discuss the standoff between Greece and
its lenders over the country's debt and austerity measures. There
have been worries in the market that Greece could leave the
eurozone if the differences aren't settled.
"While the process is likely to be far from smooth, a compromise
may materialize, after intense pressure, because Greece needs
funding to make payments at some point, in the context of weakening
tax revenues," Daniele Antonucci, senior European economist at
Morgan Stanley, said in a note Friday.
The emergency liquidity assistance "which is crucial for the
Greek banking system, needs the [European Central Bank's]
approval," he added.
The Eurogroup meeting is expected to begin at 2 p.m. London time
or 9 a.m. Eastern Time.
London decliners: Shares of Intertek Group PLC were among the
worst performers on the FTSE 100, losing 3.1% after Jefferies cut
its rating on the product-testing and certification company to hold
from buy. Jefferies said cuts in capital expenditures in the oil
and gas industry, along with delays, cancellations and pricing
pressure are likely to lead to reductions of about 10% in per-share
consensus forecasts for Intertek, as well as for Spanish testing
firm Applus Services SA . It noted that 40% of Intertek's group
revenues are exposed to the oil and gas industry.
Rolls-Royce shares moved down 0.7% after the engine maker's name
came up in connection with Petrobras (PBR). A former executive at
the Brazilian oil heavyweight claimed he was paid $200,000
(GBP307,628) by Rolls-Royce so the British company could land a
contract worth $100 million, media reports said. The claim was
revealed in court documents related to testimony by the executive,
Pedro Barusco, who last year reached a plea bargain with Brazilian
authorities. Rolls-Royce was quoted by the Financial Times
newspaper as saying it will "not tolerate improper business conduct
of any sort" and that it will "take all necessary action to ensure
compliance."
In other moves in London, the utilities group fell more than 1%.
British Gas parent Centrica PLC was down 2.5% ahead of the
company's financial report, scheduled for release on Thursday.
United Utilities Group PLC shares were off 1.1%, SSE PLC lost
1.6%, National Grid PLC fell 1.7%, and Severn Trent PLC pulled back
0.6%.
London gainers: Oil producer Tullow Oil PLC shares rose 2.8%,
and brewer SABMiller PLC (SBMRY) picked up 1.9%. Tesco PLC (TSCDY)
shares were up 0.5% following a report in The Telegraph over the
weekend that the supermarket chain is poised to cut up to 10,000
jobs, including up to 6,000 at the company's head offices.
Off the main benchmark, 888 Holdings PLC shares slid 12% after
the online betting company said it terminated discussions about a
possible merger with William Hill PLC . "Due to a significant
difference of opinion on value with a key stakeholder, it has not
been possible to reach agreement on the terms of a possible offer,"
said 888 Holdings in a statement. On the FTSE 250 , William Hill
shares were up 0.8%.
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