LONDON 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 (ULVR.L) dropped 3.4 percent and Tesco (TSCO.L) 3 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 among the biggest fallers, with the UK mining index .FTNMX1770 dropping 3.3 percent.
"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 (BLT.L) and Rio Tinto (RIO.L) both dropped over 4 percent after Citi cut their ratings to "sell" from "neutral".
The FTSE 100 index .FTSE was down 0.7 percent, its third day of losses, and hit 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 top individual loss was insurer Standard Life (SL.L), down 5.1 percent after a downgrade by Barclays.
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 medium-sized companies.
The negative effect of the Brexit vote on consumers has started to emerge. Britain's biggest retailer, Tesco (TSCO.L), pulled dozens of Unilever (ULVR.L) 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.
Property stocks, among the biggest underperformers since the referendum, rose, buoyed by another rise in UK house prices.
Britain's domestically focused FTSE mid-cap index .FTMC was down 0.4 percent and is now down 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.
Booker Group (BOK.L) rose 5.4 percent, after results that analysts said showed the strength of the business model.
(Editing by Larry King)