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Britain's FTSE retreats, though robust results boost Barclays

Thu, 27th Oct 2016 09:31

(ADVISORY- Follow European and UK stock markets in real time onthe Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* FTSE 100 down 0.2 pct

* Barlcays top gainer after results

* Though Amec Foster Wheeler, Berendsen weigh on midcaps

By Kit Rees

LONDON, Oct 27 (Reuters) - British shares fell on Thursdayin a choppy session as earnings updates weighed on midcaps,though Barclays rose on a robust set of third-quarter results.

The blue-chip FTSE 100 index was down 0.2 percent at6,941.99 points by 0917 GMT, while the more domestically-focusedFTSE 25 slipped 0.9 percent.

The FTSE 100 retreated after upbeat UK GDP data showed thatBritain's economy was resilient in the period following the UKreferendum to leave the European Union, prompting a rise insterling and sending UK bond yields to a post-Brexit high.

"A stronger-than-expected GDP figure from the UK ... doesfuel the story that the Bank of England won't have to act anytime soon to actually prop up the economy, because it seems tobe doing fairly well," Jonathan Roy, advisory investment managerat Charles Hanover Investments, said.

"If we see a strengthening in the pound, that's likely totake the shine off some of these multinational companies thathave rallied on expectations of higher profits on a weakerpound."

Barclays, however, was the top riser on FTSE 100,up 1.7 percent after its third quarter results beat forecasts.

The lender posted a rise in third quarter profits to 1.7billion pounds ($2.08 billion), helped by an improvement in itsinvestment banking division.

"Barclays still has work to do, but there's an increasingamount of light at the end of the tunnel," Laith Khalaf, senioranalyst at Hargreaves Lansdown, said in a note.

"However despite the bank's international exposure, it isstill vulnerable to poor economic conditions in the UK, so if wedo get a Brexit-induced slowdown, Barclays will feel the burn."

Barratt Developments fell more than 6 percent aftertrading ex-dividend, while BT dropped 3.4 percent afterits own update.

The British midcaps underperformed their blue-chip peersafter disappointing results weighed on shares in Amec FosterWheeler and Berendsen.

Oil services firm Amec Foster Wheeler slumped more than 18percent, heading for its worst day in almost a year aftercancelling its capital markets day and posting weak salesfigures.

Commercial laundry company Berendsen tumbled nearly17 percent on a profit warning.

This follows profit warnings from fellow midcaps Cobham, Keller and Senior over the past week.

"This earnings season isn't shaping up to be particularlygreat for medium-cap companies. They are the ones that arefeeling the pinch of Brexit that's been demonstrated in recentsets of earnings," Charles Hanover Investments' Roy said. (Reporting by Kit Rees; Editing by Andrew Heavens)

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