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Britain's FTSE heads for worst quarter since 2011

Thu, 29th Mar 2018 10:10

(There will be no London-based FTSE report on Friday March 30and Monday April 2 due to public holidays in the UK.)

* FTSE 100 up 0.4 pct

* FTSE set for worst quarter since 2011

* Cyclicals lead gains

By Kit Rees

LONDON, March 29 (Reuters) - A recovery in cyclical stocksboosted the UK's top share index on Thursday, set for a mildlyupbeat end to the FTSE 100's worst quarter in nearly sevenyears.

The blue chip FTSE 100 was up 0.4 percent at7,072.42 points by 0900 GMT, while mid caps gained 0.5percent as traders prepared for a market holiday.

Gains in cyclical stocks, which are more dependent on theeconomic cycle, added the most points to the index. Shares inminers Anglo American, BHP Billiton and Glencorewere among the biggest gainers, rising 1.5 percent to2.4 percent as the underlying price of copper ticked higher.

However, the first quarter has been a bumpy ride for Britishstocks, marred by a spate of profit warnings, troubles in theretail and outsourcing sectors as Brexit uncertainty also hangsover the region's equities.

"There's been negative sentiment towards UK equities for asignificant period now, stemming all the way back to the EUreferendum,", Laith Khalaf, senior analyst at HargreavesLansdown, said.

"What we've had in 2018 is more of a global phenomenon, sowe've have had a bit of volatility returning to markets," saidKhalaf, adding that this is a more normal state of affairs formarkets.

On the domestic front, high street stalwarts such asDebenhams, Mothercare and Moss Broshave all tumbled after profit warnings, examples of a toughenvironment for retailers struggling in a digital age.

The collapse of outsourcer Carillion has furtherdented confidence in UK domestic stocks, while peer Capitahas slashed profit forecasts and made plans to raisecash to avoid a similar fate.

The outlook is uncertain not just for UK domestics, however.A resurgent pound has reduced the forex-related boost enjoyed bybig, international FTSE companies which benefited from anaccounting boost following sterling's slump in the immediateaftermath of the June 2016 Brexit vote.

Britain's FTSE 100 was on track to end the first quarter of2018 with a loss of 8 percent, its worst quarter since 2011 andmaking it the weakest-performing major European market so farthis year, closely followed by Germany's exporter-heavy DAX.

A shock spike in volatility in February rattled global stockmarkets, which have also been hit by concerns over the prospectof a global trade war and a tumble in the heavyweight U.S. techsector.

(Reporting by Kit ReesEditing by Keith Weir)

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