October 24, 2018 / 9:15 AM / 25 days ago

FTSE ends off highs but consumer goods lend support

LONDON (Reuters) - UK shares ended well off highs on Wednesday but still managed to recover from the previous day’s seven-month lows, as a stronger U.S. dollar boosted consumer goods makers.

City workers make phone calls outside the London Stock Exchange in Paternoster Square in the City of London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo

The FTSE 100 .FTSE was up just 0.1 percent at the close after rising 1.3 percent at one point during the session.

The index tracked a sudden turn in global stocks that dragged the Dow Jones and the broader European stock market into negative territory following a positive open.

“The main problem is that overall sentiment is very negative this has been made worse in the last few days by the fact that on a technical level sell signals have been generated,” said Markus Huber, trader at City of London Markets.

“There is too much uncertainty out there in regard to a Brexit deal, possible trade wars, Italian budget, Turkey, disappointing earnings, Fed tightening too aggressively, just to name a few,” he added.

These worries made traders risk averse, prompting them to take profit to reduce their overnight exposure, Huber said.

The mid-cap FTSE 250 rose 0.3 percent after hitting its lowest levels since February 2017 on Tuesday.

Among the biggest gainers on the FTSE 100 were multinationals with less exposure to the pound GBP= Diageo (DGE.L) and Reckitt Benckiser (RB.L), up 0.7 and 2.2 percent respectively.

The pound eased to seven-week lows ahead of Prime Minister Theresa May’s address to restive Conservative Party lawmakers on her Brexit strategy later in the day.

The FTSE 100, which is on track for its worst monthly performance since 2012, derives 70 percent of its profits from overseas.

Luxury goods maker Burberry (BRBY.L), up 0.1 percent, was supported by a positive third-quarter report and rosy outlook on China, the world’s second-largest economy, from French luxury goods company and owner of the Gucci brand Kering (PRTP.PA).

A broadly confident outlook helped Barclays Bank (BARC.L) rise 2.9 percent

But competition in the UK mortgage market hit Metro Bank (MTRO.L), which sank 12.3 percent to the bottom of the midcap index, set for its biggest one-day drop in more than two years.

Stobart Group (STOB.L) fell 5.3 percent after its interim earnings report.

Reporting by Josephine Mason; Editing by Robin Pomeroy

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