London prices hurt by British Gas's drubbing; Tokyo shares slide, pressured by rising rates
London stocks fell to their lows, after a British regulator ordered British Gas to cut its natural-gas prices. Tokyo shares slid 1.2% Monday in trading dominated by selling to unwind arbitrage positions amid caution because of rising long-term interest rates in Japan. Sao Paulo prices rallied to a 19-month high.</br></br>World-wide, stock prices rose in dollar terms. The Dow Jones World Stock Index climbed 0.64 point to 140.01, reflecting higher markets in the Americas and the Asia/Pacific region, excluding Japan. The Europe/Africa region declined.</br></br>Semiconductor stocks were the top gainers in the Dow Jones World Industry Groups, closing at 347.91, up 10.32, or 3.06%, with Analog Devices of the U.S. posting a 7.73% gain. Gas utility stocks trailed at 87.25, down 2.51, or 2.80%, with British Gas of Britain sliding 12% in local currency.</br></br>In London, the Financial Times-Stock Exchange 100-share index dropped 15.2 points to 3739.2, near the intraday low of 3738.0, after notching a session peak of 3760.9. The FT 30-stock index declined 18.1 points to 2794.5. Provisional volume was 582.9 million shares, compared with 633.2 million shares on Friday.</br></br>London dealings were dominated by a big sell-off of British Gas shares, which plummeted 27 pence to 228 pence ($3.47), after Britain's gas-market regulator, in a move aimed at reducing consumer prices by 10%, ordered the company's Transco unit to cut its prices to suppliers between 20% and 28% starting next April. British Gas said this could slash its annual revenue at least $993 million and cause it to eliminate 10,000, or 20%, of its 49,000 jobs. The regulatory agency and the company are to hold talks, which could take two months, on final proposals for the curbs, and if they can't agree, British Gas vowed to take the case to the government's antitrust commission. The British Gas stock slide, which wiped almost #1.2 billion ($1.82 billion) off its market capitalization, knocked about 7.5 points off the FT-100 index, with an additional three points of the total drop attributed to several big companies' going ex-dividend. Many investors bowed out, awaiting today's U.S. consumer-price data and this week's earnings reports by some big British companies.