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Britain’s FTSE 100 posts worst weekly loss since mid-June

Britain’s FTSE 100 posts worst weekly loss since mid-JuneBritain’s FTSE 100 posts worst weekly loss since mid-June

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the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* FTSE 100 ends down 0.2 pct at 6,858.95 points

* Index had hit 14 month high on Monday

* FTSE 100 up 10 pct so far in 2016

* But U.S. dollar value of UK stocks hit by sterling slump

By Alistair Smout

LONDON, Aug 19 Britain’s top shares index fell
on Friday to post its worst weekly drop since mid-June as its
earlier rally up to 14-month highs stalled, with mining stocks
hit by weaker copper prices.

Britain’s FTSE 100 ended down 0.2 percent at
6,858.95 points, taking its total fall for the week to 0.8
percent. This marked its biggest weekly decline since mid-June,
before Britain voted to leave the European Union.

Speculation that Britain could formally begin the process of
leaving the European Union early next year also caused a brief
wobble in the FTSE 100. A government spokeswoman said Prime
Minister Theresa May would not invoke Article 50 – needed to
trigger the process – before the end of this year.

“The less time the UK has to get things in order, the
greater the market fears the fallout,” said ETX Capital analyst
Neil Wilson.

Mining stocks such as Glencore were the worst
performers, with the sector impacted by weaker copper prices.

Shares in oil majors BP and Royal Dutch Shell also dipped as oil prices retreated.

EasyJet, however, rose 2.5 percent on the back of a
media report of takeover interest in the budget airline.

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The FTSE 100 has recovered from an initial slump after
Britain’s shock “Brexit” vote in late June to quit the EU,
thanks partly to the Bank of England’s decision to cut interest
rates to a record low.

The record low rates have hit returns on bonds and cash,
weakening sterling and giving a boost to exporters and the FTSE
100’s internationally-focused firms that earn revenues in U.S.
dollars and typically benefit from weakness in the pound.

The FTSE 100 is up around 10 percent so far in 2016,
although the value of UK shares in U.S. dollar terms has been
hit by the pound’s fall on currency markets.

(additional reporting by Sudip Kar-Gupta)

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