FTSE 100 falls, with Petrofac hit by profit warning

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(Close): Shares in Petrofac fell by a quarter after the oil and gas services firm issued a profits warning, due to lower oil prices and problems with a project in the Shetland Islands.

Petrofac's shares dived 26.45% after it said net profits would be about $500m in 2015, well below expectations.

It also said net profit this year would be at the lower end of its previous guidance of $580-600m.

Overall, the benchmark FTSE 100 index was down 20.97 points at 6,729.79.

Shares in Friends Life rose 5.9% following Friday's announcement that it had agreed terms to be bought by Aviva in a £5.6bn deal. Shares in Aviva fell 5.38%.

Shares in BT Group rose 3.71% after the telecoms firm said it was in early talks with Spain's Telefonica about buying the O2 mobile network.

BT said it had received "expressions of interest" from shareholders in two UK networks, with reports citing the second one was EE.

While the UK market was down slightly, shares in other European markets were doing well following comments from the head of the European Central Bank (ECB) on Friday.

Mario Draghi said the ECB was ready "step up the pressure", and take more measures to try to boost growth in the eurozone and to lift inflation.

Germany's Dax index was up 0.54% while France's Cac 40 climbed 0.49%.

Hopes that any new ECB action would see it buy government bonds pushed Spanish 10-year bond yields below 2% for the first time, and sent yield on Italian, Irish, French and Austrian bonds to record lows.