STOCKS NEWS EUROPE-UK Small Caps end 1.3 pct lower

The FTSE Small Cap index .FTSC closes 1.3 percent lower, with the FTSE 100 .FTSE off 1.8 percent and the the FTSE 250 .FTMC shedding 2.2 percent as the UK market falls on fears the summer's rally may have been overplayed.

Drug delivery company SkyePharma (SKP.L) slumps 12.4 percent after saying it will need to do more tests on its asthma drug Flutiform, pushing the expected U.S. approval out to late 2011.

Aim-listed explorer and developer Stratex (STIL.L) surges more than 12 percent after announcing it is expanding operations into Ethiopia through the acquisition of a 5.6 percent interest in Sheba Exploration, and it has signed a binding letter of intent to earn-in to an initial 60 percent of its prospective Shehagne project.

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