STOCKS NEWS EUROPE-UK gas suppliers fall as govt says margins too high

Shares in utility groups Centrica (LSE: CNA.L - news) and SSE (LSE: SSE.L - news) are among top fallers on Britain's FTSE 100 index, with traders citing regulatory worries after the country's energy secretary Ed Davey said the profit margins of large gas suppliers are too high.

Centrica and SSE are down 3 percent and 1.1 percent, respectively, underperforming a flat FTSE 100 index. Volume in Centrica's shares is a third of its full-day average for the past 90 days at 0854 GMT, compared to just a tenth for the FTSE.

Davey urged the energy regulator to investigate the gas supply margins made by the Big Six energy companies, Centrica's British Gas, SSE, EDF Energy , RWE (Xetra: RWE.DE - news) 's npower, Iberdrola (Other OTC: IBDRY - news) 's Scottish Power and E.ON . He also suggested dominant player British Gas may have to be broken up.

SSE and Centrica fell 12 percent and 20 percent in the six months to last Friday as they became entangled in a political dispute in Britain about high energy bills.

"Both have been on the slide for a while prior to this, and have a lot of clouds looming over them," Ed Woolfitt, head of trading at Galvan, said.

"Technically they look like a short but if any of the news goes in their favor it could trigger a spike against the downtrend."

The Big Six agreed in December to limit increases to household bills and SSE (Berlin: SCT.BE - news) said last month it planned to cap energy prices for about a year from this March.

Reuters messaging rm://francesco.canepa.thomsonreuters.com@reuters.net