June 27, 2018 / 9:18 AM / 5 months ago

Trade troubles take their toll on Britain's FTSE

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* FTSE 100 down 0.3 pct

* Oil stocks on the rise

* Upgrades boost Carnival, Sainsbury’s

* IWG falls after profit warning

By Kit Rees

LONDON, June 27 (Reuters) - The UK’s top share index lost ground on Wednesday as persistent jitters over global trade kept risk appetite subdued, though buoyant energy stocks helped stem losses.

The blue chip FTSE 100 index was down 0.3 percent at 7,516.24 points by 0905 GMT, with the index’s large weighting in commodities stocks helping it outperform a broadly negative European market.

Tensions over trade between the U.S. and China have hit stock markets this week, with the FTSE sliding more than 2 percent on Monday after U.S. President Donald Trump announced plans to bar Chinese companies from investing in U.S. technology firms and block additional technology exports.

On Tuesday, the U.S. House of Representatives passed a bill to tighten foreign investment rules.

Banking stocks, which tend to be more volatile than other sectors, were the biggest drag on the FTSE and took 13.5 points off the index. Shares in HSBC, Barclays and RBS all fell 1 percent to 1.8 percent.

“It’s certainly not risk-on,” Mike van Dulken, head of research at Accendo Markets, said.

“The trade thing remains probably the biggest cloud - how much of a cloud remains to be seen and that’s where markets remain uncertain,” van Dulken added.

Among individual stocks, shares in Carnival continued a recovery from a sell-off on Monday prompted by weak guidance in its results. The recovery was boosted by an upgrade from Berenberg to “buy” from “hold”.

“We believe that the backdrop of strong consumer confidence continues to support the industry and, while we acknowledge the incoming supply, we do not see any evidence that supports the sell-off in the shares since the Q2 2018 numbers,” analysts at Berenberg said in a note. Carnival’s shares were up 1.8 percent.

Likewise a Barclays upgrade to “overweight” gave Sainsbury’s shares a boost, with analysts at the investment bank saying that the supermarket’s proposed deal with Walmart-owner Asda “makes sense”.

Also on the consumer front, shares in Whitbread rose nearly 2 percent, shaking off a dip in first-quarter sales. Neil Wilson, chief market analyst for Markets.com, said that Whitbread’s results were in-line though continued weakness in like-for-like sales was a cause for concern.

Among smaller stocks, shares in serviced office provider IWG were the worst performers on the mid cap index, down 4.4 percent after the takeover target warned on profit on the back of a weak performance in Britain and the cost of opening new space. (Reporting by Kit Rees Editing by Peter Graff)

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