Engineers push UK FTSE 100 down on earnings concerns
* FTSE 100 down 0.1 percent
* Engineers hit by profit warnings in sector
* Chinese data illustrates slowdown
By Toni Vorobyova
LONDON, Oct 12 (Reuters) - Britain's FTSE 100 eased on Friday, with a second profit warning in a week from the engineering sector underscoring concerns about the health of third quarter earnings in the face of slowing global and domestic demand.
Mid-cap Morgan Crucible
fuelled concerns about slowing growth in China, blaming that and weak demand in Europe as it said full-year results could be significantly below its expectations and unveiled plans to cut jobs.
The profit warning, hot on the heels of one on Monday from fellow industrial materials maker Cookson Group
, pushed other engineering companies to the top of the FTSE 100 fallers list. GKN
, IMI and Melrose each lost 2.3 to 2.9 percent. The FTSE 100
was down 6.83 points or 0.1 percent at 5,822.92 points by 1028 GMT, taking its losses for the week to 0.8 percent. The mid-cap FTSE 250
fell 0.2 percent, led by an 11 percent drop in Morgan Crucible in heavy volumes, already at nearly three times the 90-day daily average.
"The screen would tell you it's pretty serious. Whilst we had anticipated that trading would be tough in the second half, it's become clear in Europe and also in China that trading has toughened through the third quarter and that is leading to a reassessment of prospects for the full year," said Dominic Convey, analyst at Peel Hunt.
Convey is reviewing his forecasts for the sector.
"Morgan is getting particularly hit today because it finds itself in the spotlight, but the sector is trading down in sympathy, people are re-rating the sector."
Chinese data on Friday offered more proof of the slowdown hitting the world's biggest metals consumer, with bank lending missing forecasts in September.
For corporates, the one silver lining of the cloud would be if such data prompts Chinese authorities to dole out more stimulus.
China has been an important growth market for UK companies at a time of spending cuts at home and in Europe. In a fresh blow for UK consumers, Centrica
, the owner of Britain's biggest energy supplier British Gas, said it will increase domestic gas and electricity prices by 6 percent next month.
Shares in Centrica fell 0.7 percent.
The tough market conditions - with third quarter earnings among Britain's large and mid-cap companies seen down on average 7.4 percent year-on-year, according to Thomson Reuters Starmine - has increased the value of stock picking.
On Friday Hargreaves Lansdown stood out. The investment manager topped the FTSE 100 gainers with a 4 percent share price rise after reporting record high assets and rising revenues.
The firm is in a good position to benefit from a planned overhaul of how consumers are sold investment products from January.
"HL reports an excellent start to October," said Simon Willis, analyst at Daniel Stewart.
"It is well placed ahead of the Retail Distribution Review (RDR), with a competitive fee structure that is ready to go."
(Reporting by Toni Vorobyova; Editing by Anthony Barker)
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