UPDATE 1-Weak utility stocks limit broader gains for UK's FTSE
* FTSE closes up 0.3 pct at 6,591.55 points
* FTSE 100 rises for fourth straight session
* Energy Secretary's comments hit utility sector
* Fall in utility shares prevents FTSE from bigger gains
* Barclays and AstraZeneca add most points to FTSE 100
LONDON, Feb 10 (Reuters) - Fresh political pressure on British utilities hit the sector's stocks on Monday, limiting broader gains in the UK's top equity index although it rose for the fourth straight session.
The blue-chip FTSE 100 index closed up by 0.3 percent, or 19.87 points, at 6,591.55 points.
Gains at British bank Barclays and drugmaker AstraZeneca together added the most points to the FTSE, enabling the index to shrug off the effects of a pullback in the utility sector.
Barclays rose 1.2 percent as analysts welcomed its plans to step up its cost-cutting programme after the bank published a snapshot of its headline 2013 results, while AstraZeneca rose 1.4 percent after Morgan Stanley increased its price target on the stock.
However, a decline in major utility stocks prevented the FTSE 100 from making even bigger gains.
The utility sector was hit after British Energy Secretary Ed Davey wrote to regulators to say the profit margins of major energy companies' gas supply units were too high.
Davey also said British Gas may have to be broken up and his comments knocked shares in the sector, with British Gas owner Centrica falling 1.7 percent while rival SSE declined by 0.4 percent.
Utility stocks are often favoured by investors for their solid dividend yields, but Cavendish Asset Management fund manager Paul Mumford said political pressures on the sector were turning him away from holding those stocks.
"I don't bother to hold them because you're up against all these political headwinds," he said. "There are other areas of the market where you don't have the same amount of regulatory interference," added Mumford, who said his preferred UK equity sectors include oil and gas, and property.
The FTSE 100 rose 14.4 percent in 2013 to post its best annual gain since 2009, but the index has declined 2.3 percent since the start of 2014 as global equity markets have fallen due to concerns over a slump in emerging markets economies.
Despite this weak start many investors with a long-term view expect the FTSE to rise slowly over the course of 2014, partly helped by a gradual recovery in the British economy.
Mike Franklin, chief investment strategist at Beaufort Securities, said the index could rise by around 5 percent over the next two weeks to reach the 6,900 point level.
"The pace of returns may be a bit slower this year, but the primary bull market is still intact," he said.
- Bike-riding nurse defies Ebola quarantine, on collision course with governor |
- Clashes erupt as Israeli police kill Palestinian suspected of shooting Jewish far-rightist |
- Ukraine, Russia, EU agree to natural gas supply deal
- Apple's Cook: 'I'm proud to be gay'
- Iraqi Kurdish forces enter Syria to fight Islamic State |