REFILE-UPDATE 2-Strong sterling knocks FTSE 100 despite trade lull

  • Reuters
  • Commodities News
REFILE-UPDATE 2-Strong sterling knocks FTSE 100 despite trade lull

(Reinstates dropped word 'said' in para 7)

* FTSE 100 down 0.6%, FTSE 250 up 0.2%

* Exporter stocks fall as pound surges

* CYBG tanks on mid-caps

* Online retailer Boohoo jumps after forecast upgrade

* Industrials up on upbeat forecast from European peers

By Muvija M and Indranil Sarkar

Sept 5 (Reuters) - London's FTSE 100 slipped on Thursday as a surge in sterling pushed exporter stocks lower, missing out on a global rally led by growing hopes of a resolution to the U.S.-China trade dispute.

The FTSE 100 .FTSE slid 0.6%, with multinationals including spirits company Diageo DGE.L , pharma giants AstraZeneca AZN.L and GlaxoSmithKline GSK.L slipping about 3% as a strong pound meant the value of their U.S. earnings was lower.

Sterling recorded its biggest two-day rise in 10 months as no-deal Brexit worries took a break, after lawmakers voted to prevent Prime Minister Boris Johnson from taking Britain out of the European Union without a deal on Oct. 31. in the local currency lifted the more domestically focussed mid-cap index .FTMC by 0.2%, despite a 21% slump in CYBG CYBGC.L to an all-time low. The Yorkshire Bank and Virgin Money (LON: VM ) owner said it expected to increase its provision for legacy payment protection insurance costs. trading without dividend entitlement on the day such as BHP BHPB.L , Glencore GLEN.L and Micro Focus MCRO.L fell between 1.2%-3%, weighing heavily on the blue-chip index. Micro Focus is also set to be relegated from the index later this month. indexes on Wall Street and Europe scaled a one-month high as agreement by China and the United States to hold high-level trade talks in October spurred hopes that the trade dispute between the countries would be resolved. one was feeling cynical, Thursday's rally could be used to illustrate investors' refusal to learn from their past mistakes, stung time and time again by a pair of superpowers who never manage to deliver on their trade talk promises," said Spreadex analyst Connor Campbell.

The FTSE 100 had suffered its only monthly fall this year in August when trade tensions escalated between the world's largest economies.

As investors turned to riskier assets on account of renewed trade hopes and away from safe haven gold, precious metals miner Fresnillo FRES.L tumbled nearly 6% and was the steepest faller on the FTSE 100.

Industrial giants BAE Systems BAES.L and Rolls-Royce RR.L helped limit the index's fall with gains of 1% each after French engine maker Safran SAF.PA hiked a profit forecast and Rafale warplanes maker Dassault Aviation AVMD.PA affirmed a higher net sales target.

Another prominent gainer was turnaround specialist Melrose MRON.L which jumped 9% after its first-half profit beat estimates.

On the mid-cap bourse, specialist media services company Future Plc FUTR.L surged 10% after upbeat forecast, while payments solutions provider Network International NETW.L lost 7.5% as its major shareholder Emirates NBD Bank sold stock at a discount. online fashion retailer Boohoo BOOH.L shot up by 15.1% to a life high after raising its annual revenue growth forecast and small-cap oil firm EnQuest ENQ.L climbed 7% after affirming its full-year production view and cutting debt.

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