British shares slipped back on Monday, taking a breather after sharp gains propelled the FTSE 100 index to record highs.
The FTSE was down 19.34 points or 0.3 per cent at 7,003.17 by 0843 GMT, after briefly inching higher to mark a new record at 7,027.33.
The blue-chip index posted a record close of 7,022.51 on Friday.
It has been spurred to new highs by signals from the US Federal Reserve that an expected interest rate hike could be later than markets had anticipated, while Bank of England officials have also struck a more dovish tone in recent statements.
“We are nervous of buying into a rally that is less about improved corporate earnings forecasts, and more about delving into the tea leaves of statements from the US Fed,’’ Tom Elliott, international investment strategist at deVere Group, said.
Highlighting some of the earnings issues that FTSE 100 companies face, Deutsche Bank downgraded cruise-operator Carnival to “hold’’ from “buy’’, ahead of results due on March 27.
The bank said that foreign exchange volatility could affect earnings. Shares in Carnival were down 2.5 per cent, a top FTSE faller.
“We remain positive on (Carnival) as we think the medium term earnings recovery potential remains intact, however with only 5 per cent upside to our 34 pound price target we move our recommendation to hold,’’ the analysts said in a note.
Meggit also fell after a downgrade, dropping 1.9 per cent after Bernstein cut its rating on the engineer to “market perform’’ from “outperform’’.
Standard Chartered was the top FTSE 100 performer, rising 2.9 per cent to take gains in the last week to over 15 percent off the back of positive broker comment.
Citi and JP Morgan were the latest to upgrade their view on the Asia-focused bank on Monday, with Citi welcoming the appointment of Bill Winters as the bank's new CEO, saying he can unlock value in a stock that dropped nearly 30 percent in 2014.