* FTSE 100 index falls 0.4 percent
* IAG slips on cautious broker comments
* Charts signal further weakness in near term
By Atul Prakash
LONDON, March 24 British blue chip shares fell
on Monday, with energy providers hit by concerns they may be
forced to break up their businesses, while weak Chinese economic
data hurt miners.
International Consolidated Airlines Group, which
owns British Airways and Iberia, fell 2 percent, making it the
top decliner on the FTSE 100 index, after Morgan Stanley removed
it from its "Europe Best Ideas" list.
The investment bank said it preferred low-cost carriers as
they had scope to outperform.
The FTSE 100 index was down 0.4 percent at 6,530.99
points by 1130 GMT and has now fallen for nine of the past 12
trading sessions, pulling it down more than 4 percent this
Housebuilder Barratt Developments fell 1.9 percent
on a downgrade by Davy Research to "neutral" from "outperform".
The FTSE 100 is down about 3 percent since the start of the
year after gaining 14 percent in 2013.
Overall market sentiment remained fragile due to persistent
geopolitical tensions in Ukraine and the prospect of slower
growth in China following a lower-than-expected Chinese
purchasing managers index. However, the Chinese data also
started fresh speculation that Beijing could launch new
"Some caution is still required given concerns about a
growth slowdown in China and what's going on in Ukraine," Keith
Bowman, equity analyst at Hargreaves Lansdown, said.
"We are seeing signs of a slowing Chinese economy. But
weaker economic indicators also raise hopes that the authorities
will take further action to help stimulate growth. That explains
why losses in mining stocks are limited today."
Miners Randgold Resources, Antofagasta and
BHP Billiton were down 0.3 to 1.5 percent.
Energy firms fell on concerns of a break-up. SSE and
Centrica dropped 1.9 percent and 1.5 percent
respectively after the Sunday Times said the Competition and
Markets Authority could force big energy firms to separate their
power-generation and retail arms.
"A break-up of generation and retail wouldn't do anything
(to gas prices) but increase the cost of operations," Ingo
Becker, an analyst at Kepler Chreuvreux, said.
"Fundamentally, the fear is probably that the break-up is
going to be tied to something even worse, (such as) a break-up
of the big six into the medium 12."
Charts also indicated that the FTSE 100 index could face
further selling pressure in the near term after falling below
its 200-day moving average last week.
"The technical picture does suggest that the FTSE might not
be finished with its test of support and that we could soon be
seeing a further exploration of the recent lows, at 6,492, which
could lead to a test of the bottom created last month at 6,449,"
Bill McNamara, technical analyst at Charles Stanley, said.
"In short, we're not out of the woods yet."
Among other movers, plumbing supplies group Wolseley
, fell 1.3 percent on caution ahead of its results on
Tuesday, with investor focus shifting to its margins at its U.S.
business and outlook on 2014 profitability.
(Additional reporting by Francesco Canepa; Editing by Susan