BG & Barclays Drag FTSE 100 Lower

WEDNESDAY MARKET UPDATE: A 14% drop in BG shares and a 5% drop in Barclays shares kept the overall FTSE 100 firmly in the red

Alanna Petroff 31 October, 2012 | 6:01PM
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A steep drop in BG Group (BG.) shares held back the entire FTSE 100 on Wednesday. Shares in the oil and gas company fell by 14% after it announced that it expected lower production growth for this year and next year.

“[BG] now expects 2012 production growth of about 3%, which is about half of what we previously expected,” said Morningstar analyst Allen Good. “More important, BG expects 2013 production to be flat, well below the double-digit growth anticipated by us and the market. As a result, we are placing the shares under review until we incorporate the new guidance into our model … Our confidence in BG's ability to forecast its growth ... is diminished at this point.” 

Another laggard on the FTSE 100 was Barclays (BARC), which announced that it is now facing two new investigations by US regulators, which could further hurt the bank’s reputation. Shares in Barclays are off by 5%.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Barclays PLC198.86 GBX1.00Rating

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.