UK's FTSE 100 slips as Sainsbury's, insurers weigh

Sainsbury's retains profit forecast; shares drop

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Greggs rises as seasonal products boost growth

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Persimmon gains on growth in order book

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FTSE 100 down 0.4%, FTSE 250 off 0.1%

Jan 10 (Reuters) - Britain's FTSE 100 fell on Wednesday, with Sainsbury's sliding after the supermarket group disappointed investors who expected a profit upgrade, while insurers tumbled after a media report suggested regulators could decide to investigate premium finance products.

The blue-chip FTSE 100 slid 0.4%, with shares of Sainsbury's dropping 6.3%, making it the biggest percentage faller in the index.

Investors were disappointed that Britain's second-biggest supermarket group failed to upgrade its full-year outlook despite a 7.4% increase in its underlying sales in the key Christmas quarter.

"It is clear from today's numbers from Sainsbury that consumers prioritised their spend over the Christmas period towards food and drink, eschewing more discretionary spending on bigger ticket items, even as the pressure on the cost-of-living continues to ease," said Michael Hewson, chief market analyst at CMC Markets UK.

Tesco's shares were down 1.4%.

Other big decliners were motor insurers such as Direct Line and Admiral, which fell 7.5% and 5.6%, respectively.

Traders pointed to an article in the Insurance Post that quoted the Financial Conduct Authority's Head of Insurance Matt Brewis as saying premium finance was a "poor product".

Berenberg analysts noted the implication from the report was there could be changes to the way insurers price premium finance products.

The FTSE 250 midcap index edged 0.1% lower.

Greggs helped limit losses in the index with a 5.2% jump, as the British baker reported a better-than-expected rise in like-for-like sales in the fourth quarter, driven by demand for seasonal products.

Persimmon rose 6.3% even as the British housebuilder acknowledged that housing market conditions would remain challenging this year amid broader economic woes.

Bank of England Governor Andrew Bailey said he hoped that the recent fall in the cost of mortgages would continue but said that he did not want to comment on the outlook for monetary policy. (Reporting by Shubham Batra and Sruthi Shankar in Bengaluru; Editing by Dhanya Ann Thoppil, Sherry Jacob-Phillips and Jane Merriman)