Energy providers lead FTSE lower on break-up concerns

* FTSE 100 down 0.2 pct

* Centrica (LSE: CNA.L – news) , SSE (LSE: SSE.L – news) among top fallers on break-up talk

By Francesco Canepa

LONDON, March 24 (Reuters) – Shares in energy providers led Britain’s top share index lower on Monday on concerns they may face a threat of break-up as part of an investigation into competition in the sector.

Shares in Centrica, owner of British Gas, and SSE (Berlin: SCT.BE – news) fell 1.2 percent and 1.5 percent respectively after the Sunday Times reported that Britain’s Competition and Markets Authority (CMA) could force the big six energy companies to separate their power-generation and retail arms.

The big six also include EDF Energy, RWE (Xetra: RWE.DE – news) npower and Scottish Power, which fell between 0.4 percent and 1.4 percent, as well as E.ON, which traded flat.

“A break-up of generation and retail wouldn’t do anything (to gas prices) but increase the cost of operations,” Ingo Becker, an analyst at Kepler Chreuvreux, said.

“Fundamentally, the fear is probably that the break-up is going to be tied to something even worse, (such as) a break-up of the big six into the medium 12.”

Centrica and SSE were among the top fallers on the FTSE 100 , which was down 0.2 percent at 6,544.83 points.

The index was weaker for the third session in the past four, weighed down by the prospect of slower growth in China and tighter monetary policy in the United States, which could hamper a global economic recovery.

“I think there’s going to be a few bumps on the road before people have a bit more confidence that these economies can stand on their own two feet,” said Mark Priest, senior trader at ETX Capital (Other OTC: CGHC – news) . “Investors need to be a little bit cautious about China because (it can) cause issues globally.”

Growth in China, the world’s top consumer of metals and oil, is a key factor for the FTSE 100, given the heavy weighting of industrial metals, mining and energy shares on the index.

Shares in these sectors were mixed on Monday as worries sparked by a weaker-than-expected Chinese purchasing managers index (PMI) were tempered by speculation that the weak data would lead Beijing to introduce new stimulus measures. (Additional reporting by Tricia Wright and Sudip Kar-Gupta; Editing by Gareth Jones)