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* FTSE 100 up 1.4
* BOE cuts interest rates
* Hikma slumps after update (Recasts, adds quote and detail, updates prices)
By Kit Rees and Atul Prakash
LONDON, Aug 4 (Reuters) - Britain's top share index ralliedafter the Bank of England (BoE) cut interest rates on Thursday,although pharmaceuticals company Hikma and preciousmetals mining group Randgold Resources slumped afterpoor updates.
The blue-chip FTSE 100 index rose 1.4 percent to6,729.24 points by 1134 GMT having set a new three-week low of6,615.83 early in the session.
The BoE lowered its main lending rate to a record-low 0.25percent from 0.5 percent, in line with market expectations andthe first cut since 2009, as Britain's economy teeters on thebrink of recession after June's Brexit vote.
"Post-referendum, the UK faces a lengthy period ofuncertainty. In the shorter term, this will result in lowerinvestment and consumption ... In this context, the MPC'sdecision to cut interest rates is a step in the rightdirection," Thomas Miller Investment's chief investment officer,Abi Oladimeji, said in a note.
The FTSE 250 mid-cap index, which is dominated bydomestically focused companies, extended gains to trade 1.3percent higher.
Banking sector stocks Lloyds and Royal Bank ofScotland pared gains after the BoE decision and mid-capchallenger bank CYBG fell 2.6 percent.
UK housebuilders, however, reversed their losses after therate cut, with the UK Real Estate index trading 1.2percent higher.
Some companies also gained on the back of strong results.
Aviva was up 6.5 percent after the insurer boostedprofits and cash generation in the first half of the yeardespite a challenging market backdrop, enabling it to raise itsinterim dividend.
Mid-cap outsourcing firm Serco Group surged morethan 14 percent after raising its 2016 profit forecast for thesecond time this year and said Britain's vote to leave theEuropean Union could bring opportunities as well as costs.
Some companies suffered heavily after their updates.
Hikma dropped 12.3 percent and headed for its worst one-daypercentage drop in 7 years after saying that its full-year coreoperating profit from its generics unit would be hurt by delayedapprovals of new products and higher-than-expected costs.
Randgold Resources, down 8.2 percent, also featuredamong the top decliners after it said its second-quarter profitfrom mining was flat as higher gold prices were offset by lowerproduction and increased costs. (Editing by Louise Ireland)
