LONDON (Reuters) - The UK's top share index started the week flat on Monday with stocks in consumer goods under pressure from a rise in U.S. treasury yields, which make their dividends streams relatively less attractive for investors.
At 0832 GMT, the FTSE 100 (FTSE) was down 0.1 percent while most European bourses also traded in negative territory.
Consumer good makers Reckitt Benckiser (L:RB) was the worst performer among blue chips, down 2.1 percent as JP Morgan cut its rating for the stock, which had published disappointing results last week.
Other consumer staples stocks such as Diageo (L:DGE), down 1 percent, or Unilever (L:ULVR), off 0.8 percent, lost some grounds in line with the wider European sector as their "bond proxy" profile is weakened by rise in the yield of U.S. government bonds.
WPP (L:WPP) fell 1.9 percent after Ford Motor Company (N:F) said it would take bids on some of its advertising managed by the British group, adding to uncertainty after last week's exit of founder Martin Sorrell.
M&A news provided some support for Shire (L:SHP) up 0.8 percent after Japan's Takeda Pharmaceutical (T:4502) nudged up its offer for to 44.3 billion pounds to try to persuade the rare-disease drugs specialist into talks after it rejected three previous proposals.
Whitbread (L:WTB) added 1.1 percent after the Sunday Times reported that CEO Alison Brittain believes a split between the group's hotel and coffee shop businesses is inevitable.
There were stronger price swings among smaller companies with shares in shipping services Clarkson (L:CKN) collapsing about a quarter of their value (24.1 percent) after a profit warnings due notably to lower freight rates within the tanker market.
"Lower freight rates doesn’t tally with optimism over the health of the global economy, though over capacity in the industry has also been a key factor", commented CMC Markets analysts Michael Hewson.
British IT-led outsourcer Capita (L:CPI) jumped 11.8 percent after it announced a three-for-two rights issue and a strategic plan to return it to growth.
Industrial group Rotork (L:ROR) surged 9 percent after strong rise in first-quarter revenues while shares in nanotechnology group Nanoco (L:NANON) enjoyed a 12.4 rise after the British it reported signed a new supply and development agreement with an undisclosed U.S.-listed company.