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Britain's FTSE snaps three-month winning streak as Brexit poll weighs

Tue, 31st May 2016 16:01

* FTSE 100 index down 0.6 percent at close

* ICM poll shows UK voters shift towards "Leave" for EU vote

* Inmarsat falls ahead of FTSE reshuffle (Recasts, adds detail and updates prices at close)

By Kit Rees and Atul Prakash

LONDON, May 31 (Reuters) - Britain's top share index broke athree-month streak of gains after the results of a telephonepoll showed British voters were favouring a vote to leave theEuropean Union in a June 23 referendum.

The FTSE 100 index was down 0.6 percent at 6,230.79 pointsat the close, easing from a one-month high of 6,290.07 pointstouched earlier in the session.

The phone poll by polling firm ICM published on Tuesdayshowed 45 percent of respondents favoured leaving the EUcompared with 42 percent who said they would vote to stay in thebloc.

"Widespread selling for sterling and an immediate flight tosafety signifies the fact that markets have been caught nappingwith an overconfidence that every poll would come out in favourof the 'remain' campaign," Joshua Mahony, market analyst at IG,said in a note.

While losses were broad-based, with British Land Company, ITV and Standard Chartered among thetop fallers, shares in satellite company Inmarsat dropped 3.9 percent, with analysts citing the possibility of thefirm being relegated in Wednesday's FTSE 100 index reshuffle.

Inmarsat has fallen more than 36 percent so far in 2016.

"Inmarsat's problems are partly related to the sector andpartly related to the oil price. Their clients are very largelymaritime, and maritime clients in turn are quite often linked tothe energy sector - it's just getting off its knees," said KenOdeluga, market analyst at City Index.

The UK mining index also fell, down 1.5 percentas copper prices declined on a resurgent dollar followingincreasing expectations of a U.S. interest rate hike.

Copper prices remained on track for a more than 7 percentdecline in May, the biggest monthly drop since November.

St. Louis Federal Reserve President James Bullard on Mondayechoed remarks by U.S. central bank chief Janet Yellen thatglobal markets appear to be "well-prepared" for a summerinterest rate hike by the Fed, although he did not specify adate for the move. A stronger dollar makes commodities moreexpensive for holders of other currencies.

Shares in Glencore, BHP Billiton, AngloAmerican and Antofagasta fell 1.7 to 2.4percent.

Among mid-caps, Alliance Trust rose 2.5 percentafter RIT Capital Partners made an informal mergerproposal for the investment firm. RIT confirmed talks saying amerger possibility was at "a very preliminary stage ofconsideration".

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 orfeedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Reporting by Atul Prakash; Editing by Gareth Jones)

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