Sector movers: Energy suppliers fall on fears of competition probe

24th Mar 2014 14:59

Electricity and utility stocks were trading lower on Monday after weekend reports that Ofgem could refer the 'Big Six' energy suppliers to competition regulators. The Sunday Times said that an Ofgem report on the energy market, due this month, could lead to a referral of the Big Six to the Competition and Markets Authority (CMA) and a potential break-up of the companies' operations.Ofgem will not make an immediate referral to the CMA and instead is likely to announce a one-month consultation, the newspaper said.The Big Six, which includes British Gas owner Centrica and SSE, could be forced to split their power generation and retail operations. Both stocks were trading in the red today.They have faced political pressure over rising household energy bills in recent weeks after Energy Secretary Ed Davey wrote to Ofgem in February calling for a breaking up of "any companies found to have monopoly power".Consumer group Which? and the Federation of Small Business sent joint letter to Ofgem and the competition authorities on Monday, saying that the energy market is "broken and urgently needs fixing".Which? said its survey show that 70% of the public are worried about energy prices and only 20% trust energy companies."Top of our concerns is the need to increase competition and to make trading transparent. It is now time for radical changes that deliver an effective, competitive market that works for everyone, before the scale of this crisis worsens," Which? said.Analysts at Killik said in a note today regarding the potential break-up of the industry that "it is not clear this will be beneficial to the consumer, while the uncertainty created by a review is likely to deter much-needed investment in new generation"."Clearly, at the moment, however, any outcome is being impacted by political interference, given the cross-party desire to clamp down on the cost of living," they added.Top performing sectors so far todayForestry & Paper 11,266.84 +1.06%Food & Drug Retailers 3,886.03 +0.62%Beverages 13,279.34 +0.49% & Computer Services 1,201.75 +0.43%Banks 4,419.16 +0.24%Bottom performing sectors so far todayElectricity 9,680.75 -2.20%Mobile Telecommunications 4,995.05 -1.88%General Industrials 4,194.54 -1.36%Pharmaceuticals & Biotechnology 12,055.12 -1.26%Support Services 6,486.35 -1.23%BC