(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)
* FTSE 100 down 0.5 pct
* Oil & gas companies knocked off year highs
* Miners also hit by heavy rainfall in Chile
* Centrica tumbles after results
* Travel stocks rise on upgrade
By Kit Rees
LONDON, April 18 (Reuters) - UK shares came under pressure on Monday after major oil producers failed to reach an agreement to freeze output over the weekend, sending shares in commodities-related stocks lower.
Oil & gas companies were among the top sectoral fallers after a deal to freeze oil output by OPEC and non-OPEC producers broke down on Sunday, sending oil prices tumbling.
OPEC’s de factor leader Saudi Arabia demanded that Iran, which was absent from the talks, join the global deal despite calls on Riyadh to save the agreement and help prop up crude prices.
British oil majors Royal Dutch Shell and BP fell 2.9 percent and 2.2 percent respectively, taking around 14 points off the index together.
“The fall in oil prices is sparking profit-taking as a marked slide in crude raises the question of whether BP and Shell will be able to maintain their dividend payments if oil remains lower for longer,” Russ Mould, AJ Bell Investment Director, said in a note.
Britain’s oil & gas index was knocked off year highs hit last week, dropping 2.6 percent and on track for its biggest daily loss in a month.
Weakness in oil also put pressure on the shares of mining companies, with the FTSE 350 Mining index declining 1.2 percent.
In addition, heavy rainfall in Chile forced some global miners to temporarily suspend operations, including Anglo American which was down 2 percent.
The blue-chip FTSE 100 index retreated 0.5 percent, falling to 6,312.54 points by 0812 GMT, broadly in line with the wider European market.
Britain’s largest energy supplier Centrica was another notable faller, down 2.6 percent after saying that it had lost more customers in the first quarter, which highlights that the company’s market share continues to be under pressure from rivals.
In positive territory, travel & leisure stocks led the gainers after broker Berenberg upgraded TUI to “buy” from “hold”, sending its shares 1.8 percent higher, while mid-cap Thomas Cook gained 2.3 percent after an upgrade to “hold” from “sell”.
Among small-caps, shares in Energy Assets Group soared over 38 percent on the back of a $280 million takeover from Alinda Capital Partners.
ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.
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Mike Dolan, Markets Editor EMEA. (Reporting by Kit Rees; Editing by Toby Chopra)