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* FTSE 100 falls to one-week low
* Mining companies hit by China data, Citi downgrade
* Unilever and Tesco down on pricing row
By Atul Prakash
LONDON, Oct 13 Britain's top share index slipped
to its lowest level in more than a week on Thursday, just days
after setting a record high, with basic resources stocks selling
off as metals prices fell following poor China trade data.
Unilever and Tesco both fell around 2
percent as the two companies got locked in a row over pricing
caused by a plunge in sterling after Britain's vote in June to
quit the European Union.
Mining companies were the worst performers, with the UK
mining index falling 2.5 percent, dragged down by a
1.3 to 3.0 percent decline in shares of Glencore, Anglo
American and Antofagasta.
"Weak Chinese data and some downgrades by heavyweight broker
Citi are weighing on the sector," said Jawaid Afsar, a senior
trader at Securequity. "After a strong run, some profit taking
was also expected, but any sustained weakness may see buyers
returning back again as the sector's fundamentals stay strong."
BHP Billiton and Rio Tinto both dropped
nearly 4 percent after Citi cut their ratings to "sell" from
The FTSE 100 index was down 0.4 percent, its third
day of losses, after hitting its lowest since Oct. 3. The index,
dominated by international companies, set a record high earlier
this week as sterling plummeted to a 31-year low.
The index is still up 20 percent in sterling terms from its
post-Brexit low but has gained only 7 percent in dollar terms.
Graphic on currency performance: tmsnrt.rs/2egbfVh
The pound's drop has helped many FTSE 100 companies that get
much of their revenue in dollars. But a weaker pound can also
hit consumer confidence, which often hurts small and
Britain's domestically focused FTSE mid-cap index
was down 0.1 percent, a drop of more than 4 percent from its
record high earlier this month. The index is also up around 20
percent since June 24, when the results of Britain's referendum
on leaving the EU became known.
The negative effect of the Brexit vote on consumers has
started to emerge. Britain's biggest retailer, Tesco,
pulled dozens of Unilever brands from its website in a
row over pricing related to sterling's weakness.
Unilever said it was on track to meet its full-year targets,
but the results were overshadowed by the dispute with Tesco.
Unilever has been trying to raise prices across a wide range of
goods by about 10 percent, saying it needs to offset the higher
cost of imported commodities .
"Investors should not be surprised at Unilever's demand that
Tesco pay 10 percent more for its products ... Results show that
faced with currency devaluation in Latin America, Unilever did
just that, with prices up 15.5 percent," said Nicholas Hyett,
analyst at Hargreaves Lansdown.
(Reporting by Atul Prakash, editing by Larry King)