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Slump in easyJet on profit warning hurts Britain's FTSE
October 6, 2016 / 8:56 AM / a year ago

Slump in easyJet on profit warning hurts Britain's FTSE

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* FTSE 100 index down 0.2 pct

* EasyJet falls after profit warning

* Miners track weaker metals prices

By Atul Prakash

LONDON, Oct 6 (Reuters) - Britain’s top share index edged down on Thursday, with budget airline easyJet leading the market lower after warning its profit would fall by more than 25 percent this year.

The blue-chip FTSE 100 index was down 0.2 percent by 0834 GMT, but remained within striking distance of its record high reached in April last year. The index rose to a 17-month high earlier this week and is up more than 12 percent this year.

Shares in easyJet were down 6.4 percent after hitting a 3-1/2-year low as the company said security issues dampened demand and low fuel prices meant there was more competition in the European short-haul market.

“EasyJet is facing challenging times on a number of fronts, and it’s one of the worst performing stocks in the FTSE 100 since the EU referendum,” said George Salmon, equity analyst at Hargreaves Lansdown.

“The group say that weaker sterling is making going abroad less affordable for the average Brit, while the rising threat of terrorism is putting customers off too. These are industry-wide factors. However, the competition is hotting up too.”

EasyJet has fallen 40 percent since the Brexit vote on June 23.

Miners also fell, tracking a fall in major industrial metals. The mining index fell 0.6 percent, dragged down by a fall of around 1 percent in Anglo American, Rio Tinto and Antofagasta.

Among other sharp movers, Smith & Nephew fell 3.4 percent after its shares traded without the attraction of latest dividend payouts and as Berenberg lowered its target price for Europe’s biggest maker of artificial knees and hips to 1,340 pence from 1,485 pence.

Aviva, British Land, Kingfisher, Sky , Travis Perkins and WPP fell 0.5 to 2 percent after trading ex-dividend.

Shares in British engineering company GKN rose 2 percent, the top gainer in the FTSE 100 index, after HSBC started its coverage for the stock with a “buy” rating and a target price of 395 pence. (Reporting by Atul Prakash; editing by John Stonestreet)

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