February 14, 2017 / 10:11 AM / a year ago

Rolls-Royce loss lies heavy on FTSE 100

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* Rolls-Royce posts record reported loss

* TUI jumps on improved results

By Kit Rees

LONDON, Feb 14 (Reuters) - Britain’s top share index traded flat on Tuesday, pausing after a five-day winning streak as Rolls-Royce tumbled after reporting a record loss.

The blue chip FTSE 100 index was flat in percentage terms at 7,279.54 points by 0946 GMT in choppy trade, having hit its highest level since mid-January in the previous session.

Shares in engineering firm Rolls-Royce dropped 4.9 percent after the company announced a 4.6 billion pound ($5.8 billion) loss, hit by a fine to settle bribery charges and by losses on its currency hedges.

The stock was the most actively traded on the FTSE 100, with more than 87 percent of its 30-day average volume traded in the first hour of the session. Fellow defence firm BAE Systems also fell nearly 2 percent.

Analysts cited concerns about Rolls-Royce’s outlook as putting pressure on the shares.

“Some investors may also have a restive reaction to the rather dry and narrow outlook comments, projecting only ‘modest performance improvements’ and similar free cash flow generation as in 2016,” said Ken Odeluga, market analyst at City Index.

Improved earnings, however, buoyed shares in travel firm TUI , which jumped 4.8 percent and was on track for its best day since early July 2016.

TUI reported a narrower loss for the first quarter of 66.7 million euros, a 17 percent improvement on last year, and said it aimed to start offering holidays to customers from countries such as China, India, Spain and Italy.

Analysts cited the sale of its specialist holiday arm Travelopia to KKR in a $407 million deal as a further boost to its shares.

“While we have reservations about the outlook for source markets, we are attracted to the increased diversification and the steps TUI that has taken to drive growth elsewhere in the business,” analysts at Berenberg said in a note.

Among smaller companies, a solid set of results boosted shares in Acacia Mining, which rallied 6.7 percent and was the biggest mid cap gainer.

The gold miner said that production in 2017 would rise 40 percent, and proposed more than doubling its dividend. (Reporting by Kit Rees; Editing by Mark Trevelyan)

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