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Britain's FTSE falters as financial and commodity stocks fall

Fri, 10th Jun 2016 11:21

* FTSE 100 down 1.6, hits three-week low

* Mining and energy stocks lose ground

* Brexit worries weigh on market (Adds detail and updates prices)

By Kit Rees and Sudip Kar-Gupta

LONDON, June 10 (Reuters) - Britain's top share index fellon Friday, hit by a drop in major financial and commoditystocks, while lingering uncertainty over the vote this month onEuropean Union membership also weighed on the market.

The blue-chip FTSE 100 index was down 1.6 percent at6,135.57 points by 1103 GMT, hitting a three-week low.

Losses were broad-based, with banking stock Barclays, paper and packaging company Mondi and airlineeasyJet all down over 3 percent.

Shares in insurer Standard Life fell 2.3 percentafter investment bank UBS cut its price target on the group.

A retreat in metals and oil prices also knocked back theshares of mining and energy companies such as BP and BHPBilliton.

London copper ticked lower on Friday, and was facing itslargest weekly loss in more than a month as headwinds from alikely mid-term U.S. rate hike that have boosted the dollaradded to pressure from tepid physical demand in top user China.

"With commodity markets showing weakness in China, we haveseen a second day of weakness in the FTSE," said CornhillCapital stockbroker Lewis Jones.

Several traders added they did not expect the FTSE to makemuch progress in the build-up to the "Brexit" June 23 vote onBritain's membership of the EU, given persistent uncertaintyover the result.

Although the latest betting odds on website Betfair show theimplied probability of a British vote to stay in the EuropeanUnion has risen to almost 78 percent, opinion polls remain spliton the matter.

"The heightened fears over the impact a Brexit could have inthe UK, Europe, and global economy has renewed a wave of jittersthat has weighed on global sentiment," said FXTM researchanalyst Lukman Otunuga.

Among the risk-off sentiment, precious metals miner RandgoldResources gained 0.5 percent while Fresnillo was up 0.2 as perceived safe-haven assets were in demand.

Outside of the blue chips, Deutsche Bank's downgrades toPageGroup and Hays sent both stocks around 6.6percent lower, the worst performing mid-cap stocks.

Deutsche Bank cut its rating on the pair to "sell" from"hold", saying while staffing and recruitment companies havealready de-rated, it is too early to say that a downturn is "inthe price" until the earnings downgrades have started to comethrough.

ADVISORY- Reuters plans to replace intra-day European and UKstock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia formatfrom 0600 London time through the 1630 closing bell, it willinclude the best of our market reporting, Stocks Buzz service,Eikon graphics, Reuters pictures, eye-catching research andmarket zeitgeist. Breaking news and dramatic market moves willcontinue to be alerted to all clients and we will continue toprovide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this,please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Editing by Tom Heneghan and Janet Lawrence)

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