(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 flat, mid caps up 0.1 pct
* Asia-exposed banks weigh
* easyJet tops leaderboard
* Centrica drops ahead of energy price cap law draft
By Kit Rees
LONDON, Oct 12 (Reuters) - Britain’s top share index held at a two-month high on Thursday, though a fall among financials and Centrica capped gains as did a pop higher for sterling.
Britain’s FTSE 100 was flat in percentage terms at 7,535.58 points by 0852 GMT, broadly in line with a flat European market.
Financials took the most points off the index, with shares in Asia-exposed HSBC and Standard Chartered both down more than 1 percent.
“If we do start to see an element of higher rates coming through in the UK...that’s going to be very good for the UK financials and that will probably lead them to outperform,” Jonathan Roy, advisory investment manager at Charles Hanover Investments, said.
“You could see some differentiation in both Asian-facing banks because we’re also seeing a strengthening in the pound, so when they’re repatriating the earnings here, if we see a stronger pound, that will cause some differentiation in the earnings growth going forward,” Roy added.
Both HSBC and Standard Chartered have rallied 14 percent so far this year. The Bank of England signaled last month that Britain’s economy was on track for the central bank to start raising record-low interest rates in the “relatively near term”, which has supported sterling.
Budget airline easyJet led the index, however, gaining 2.4 percent after German peer Lufthansa said that it would sign a deal to buy part of insolvent carrier Air Berlin on Thursday.
Air Berlin is also in talks with easyJet, and analysts said that any sign of consolidation in the industry was positive.
Energy supplier Centrica was the biggest faller, down 1.7 percent as investors awaited the publication of a UK draft law to cap consumer gas electricity prices.
Shares in Centrica have suffered this year after Prime Minister Theresa May proposed a price cap on the energy sector, with Centrica’s shares down more than 26 percent year to date.
Outside of the blue chips, shares in Just Eat jumped around 5 percent to hit a record level after the online takeaway firm received a provisional greenlight from Britain’s competition watchdog for its merger with Hungryhouse.
Reporting by Kit Rees