By Purvi Agarwal
(Reuters) -London’s benchmark FTSE 100 slipped on Monday as investors took a breather after last week’s rally that pushed the index to record highs, while declines in shares of packaging company Mondi after its quarterly results also weighed.
The blue-chip index briefly crossed 9,500 for the first time on Monday, its fifth consecutive session of record highs, before reversing course. It was last down 0.1% at 9,482.86 points.
The industrials sector fell 3.9%. Mondi slumped 15.4%, hitting a 12-year low, after the packaging company said growth in its core profit slowed for the third-quarter on weak demand and lower prices.
Investors across the UK and European Union were also spooked by the unexpected resignation of France’s new prime minister Sebastian Lecornu and his government on Monday, hours after he announced his cabinet line-up. This made the government the shortest-lived in modern French history.
British banks lost 0.6%.
“The fact that the French Prime Minister has resigned adds to concerns around political and fiscal stability and more broadly in the UK and Europe,” said Fiona Cincotta, senior market analyst at City Index.
“We often see the nerves surrounding the fiscal outlook reflected in banking stocks.”
Meanwhile, Citigroup double downgraded UK equities to “underweight” from “overweight. It said that the market’s exposure to defensive sectors such as consumer staples and utilities made it less attractive in an environment increasingly favouring cyclical and growth-oriented plays.
On the flip side, energy stocks gained 1.4%, tracking a rise in crude prices.
Healthcare stocks were up 0.1%. The sector had boosted the FTSE 100 last week, logging their best weekly showing since October 2008. The beaten-down sector saw investor interest after a deal between U.S. administration and drug giant Pfizer reduced some uncertainty around the sector.
Among other stocks, Aston Martin declined 6.5% after the luxury carmaker warned of a deepening annual loss due to weaker-than-expected demand in North America and Asia Pacific and the impact of U.S. tariffs.
It weighed heavily on the mid-cap index that shed 0.4% on Monday after logging its biggest weekly gain in two months on Friday.
(Reporting by Purvi Agarwal in Bengaluru; Editing by Leroy Leo)
