October 30, 2017 / 10:02 AM / a year ago

Britain's FTSE weighed down by housebuilders

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* FTSE 100 down 0.1 pct, mid caps inch up

* Berkeley leads housebuilders lower

* But Kingfisher gets Goldman support

* HSBC down after results

By Danilo Masoni

MILAN, Oct 30 (Reuters) - UK’s top share index fell on Monday, hit by a stronger pound and losses among housebuilders after a downgrade from Barclays in anticipation of measures to help the sector in the autumn budget.

Top faller on the FTSE was Berkeley, down 3.5 percent after Barclays downgraded the stock to underweight, saying its 40 percent rally year to date was at odds with the challenging conditions in the higher-end London market.

The broker also downgraded Persimmon, Redrow , Bellway and Taylor Wimpey and trimmed its price target on Barrat Developments, sending their shares down between 1.3 and 2.8 percent.

“Although measures could be impactful, history suggests that they can lack teeth (solving our ‘broken’ housing market is not easy) and we believe expectations may have run ahead of themselves,” Barclays analyst Jon Bell said in a note.

The Autumn Budget is due to be published on Nov. 22.

The FTSE 100 was down 0.1 percent by 0937 GMT, as the pound started the week up ahead of Thursday’s Bank of England meeting where the central bank is expected to raise interest rates. Mid-caps index edged up 0.1 percent.

“There is little doubt about the BoE’s decision to raise rates at this week’s meeting,” Ipek Ozkardeskaya, analyst at London Capital Group, said in a note. “The pound recovery dents the appetite, except for the energy stocks”.

HSCB Holdings, which as other big international companies on the FTSE benefits from a weaker pound, fell 1 percent following its trading update.

HSBC posted a more than five-fold rise in its pretax profit for the third quarter, as the bank expanded its market share in its key business in Asia, and helped by a lower comparative base in the year-ago quarter.

“Overall an in-line set of results with no big shocks,” said Citi analysts.

Among other stocks that benefit from pound weakness, consumer companies British American Tobacco and Diageo both fell around 1 percent.

On the upside, top gainer was home improvement retailer Kingfisher, up 2.4 percent following an upgrade to buy from Goldman Sachs, which said the market was too cautious on its “One Kingfisher” efficiency program.

BP rose 0.4 percent as the oil major found support in higher crude prices, which rose on expectations that an OPEC-led output cut due to expire next March would be extended.

BP releases its quarterly results on Tuesday.

Elsewhere among commodity stocks, Glencore inched up 0.1 percent. The miner increased its full-year marketing guidance for earnings before interest and tax to between $2.6-2.8 billion from $2.4-2.7 billion.

Among mid-caps, top gainer was Drax Group , up 3.8 percent, after Morgan Stanley raised its rating on the stock forecasting a stronger 2018 following a “challenging” 2017. (Reporting by Danilo Masoni; editing by Mark Heinrich)

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