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* FTSE 100 down 0.1 pct
* PM May calls for early election
* Burberry, oil stocks weigh
* Grocers, mid caps rise
By Kit Rees
LONDON, April 19 Britain's top share index came
under pressure once again on Wednesday, giving up the gains it
had made in 2017 as sterling held close to a
six-and-a-half-month high after Prime Minister Theresa May
called for a snap general election.
The blue chip FTSE 100 index was down 0.1 percent at
7,143.37 points by 0927 GMT, bucking a broadly positive trend on
European markets, while the UK mid caps gained 0.9
On Tuesday May made a surprise announcement that she wanted
to hold an early election on June 8.
This sent sterling to its highest level since early October
on the hopes that a stronger majority for May, who leads the
opposition Labour party by 21 points in opinion polls, will
deliver a more orderly exit from the European Union.
The British parliament was expected to formally approve
May's plan later on Wednesday.
Sterling's rise, however, weighed on the FTSE 100's
predominantly dollar-earning constituents, which have enjoyed a
rally since the June referendum last year when the UK voted to
leave the European Union.
Heavyweight oil firms Royal Dutch Shell and BP
fell, down 1.4 percent and 0.5 percent respectively.
Luxury goods firm Burberry was the biggest faller,
dropping more than 5 percent. It was set for its biggest one-day
loss since October after reporting a slight slowdown in its
fourth-quarter comparable sales growth rate.
"There is a small slowdown in Q4 Retail LFL (like-for-like)
sales over Q3 ... which may give the market pause for thought,"
analysts at Liberum said in a note.
"News of a snap UK election has seen a strong rally in GBP.
Should this continue towards polling day Burberry's own,
FX-driven rally could disintegrate. We urge investors to take
profits and sell from a position of relative strength."
More domestically exposed firms, however, such as grocers
Sainsbury, Marks & Spencer and Primark-owner
Associated British Foods, were among the top gainers,
all up between 2.2 percent to 3.4 percent.
"The interesting second-order effect from the sterling move
is the inflation story because that's been a big concern,
particularly on the consumer-facing stocks ... (because) of what
it does to their input costs," Peel Hunt strategist Ian Williams
"Historically the sectors that do relatively well when
sterling is rising tend to be ... the more domestic-focused
ones, so real estate, retail."
Likewise Britain's FTSE 250, whose firms have a greater
exposure to the domestic economy, nearly recovered the previous
session's losses and held close to record highs.
Defence stock Cobham slumped 9 percent after 683
million new shares were added to trading in its rights issue.
(Reporting by Kit Rees; editing by Mark Heinrich)