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* FTSE 100 down 0.8 pct
* Pound adds pressure after EU's Barnier comments
* SSE-Npower deal gets initial nod from UK competition regulator
By Kit Rees
LONDON, Aug 30 (Reuters) - Britain's top share index fell to a two-week low on Thursday as pressure from a firmer pound hit the index's dollar-earning constituents, though utilities were a relative bright spot.
Only around 10 stocks were in positive territory. More cyclical sectors, such as miners and financials, were the biggest weight on the index, while large, dollar-earning stocks such as British American Tobacco (JO: SNHJ ) BATS.L , Reckitt Benckiser RB.L and Diageo DGE.L fell 0.5 percent to 1.1 percent.
A stronger pound means these companies don't benefit as much when they translate their revenues from dollars and into sterling. The pound's plunge in the wake of the Brexit vote in June 2016 had previously supported the index.
Even though the pound is still at relatively depressed levels, Wednesday's comments from the European Union's chief Brexit negotiator Michel Barnier - saying the bloc was prepared to offer Britain an unprecedented close relationship after it quits the EU - provided a boost. to one side all of the other political noise around the Brexit talks, this significant change of tone could well prompt further gains for sterling in the coming days," Michael Hewson, chief market analyst at CMC Markets UK, said in a note.
Barnier also said on Thursday the EU must prepare for a no-deal Brexit, even if its goal was an orderly exit. The currency edged lower on Thursday, following weak UK consumer lending data. softer language will be a positive but a) there is yet scepticism about what it all means with few details on any of this and b) we have heard this kind of language in the past – it's just that the context to these comments lends it a more upbeat tone," Neil Wilson, chief market analyst at Markets.com, said.
Shares in SSE SSE.L gained 0.2 percent after Britain's competition regulator gave its provisional approval to a merger between the retail power units of SSE and Innogy's IGY.DE Npower. smaller stocks, oilfield services provider Hunting HTG.L was by far the biggest riser on the mid cap index, its shares surging 11.5 percent to their highest level since the beginning of June after it posted a profit for the first-half and reinstated its dividend.
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