UPDATE 2-FTSE 100 slides as UK postpones lockdown easing

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)

* British Airways owner slides on planned equity raise

* LSE jumps on profit rise, considering selling Milan bourse

* BT down on bleak outlook, IAG drops on plans to raise $3.3
bln

* FTSE 100 down 1.5%, FTSE 250 off 0.5

* FTSE marks first monthly loss in four
(Updates to close)

By Sagarika Jaisinghani and Susan Mathew

July 31 (Reuters) - London's FTSE 100 erased session gains
to end at 10-week lows on Friday after Britain postponed the
easing of a coronavirus-induced lockdown as cases surged,
raising fears that a nascent economic recovery may reverse.

Just hours after imposing tougher measures on swathes of
northern England, Prime Minister Boris Johnson announced that
casinos, bowling alleys and skating rinks, due to reopen on
Saturday, would remain shut for at least two more weeks.

"The UK's move away from further easing of lockdowns... put
bullish sentiment on the back foot, and further reduced the
desire to move back into stocks at month end," said Chris
Beauchamp, chief market analyst at IG.

The FTSE 100 ended down 1.5% after having gained as
much as 1.7% during the day when upbeat earnings from British
American Tobacco and Glencore had lifted the
index.

But both stocks later gave up gains, down 5% and 1.4%
respectively, as sentiment turned.

The blue-chips index fell 4.4% in July, its first monthly
fall since the coronavirus-driven crash in March, on fears that
another round of shutdowns could cripple business
activity.

While a worsening economic outlook has raised bets of more
stimulus from major central banks, Britain's central bank is
expected to keep its policy unchanged when it meets next week.

British Airways-owner IAG tumbled 9% as it said it
would raise about 2.75 billion euros ($3.27 billion) to
strengthen its finances, while broadband and mobile operator BT
Group dropped 8.6% after it laid out grim forecast for
the year.

A strong sterling also weighed on internationally focused
stocks on the FTSE 100.

The London Stock Exchange Group, meanwhile, rose
1.7% after reporting an 8% rise in first half profit and saying
it may sell all or part of Borsa Italiana to help secure its $27
billion Refinitiv deal.

The mid-cap FTSE 250 fell 0.5%, although a 21.5%
surge for Pets At Home capped losses after it posted a
smaller-than-feared drop in quarterly sales.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Gareth Jones)