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 onFriday, with a second profit warning in a week from theengineering sector underscoring concerns about the health ofthird quarter earnings in the face of slowing global anddomestic demand.

Mid-cap Morgan Crucible

fuelled concerns aboutslowing growth in China, blaming that and weak demand in Europeas it said full-year results could be significantly below itsexpectations and unveiled plans to cut jobs.

The profit warning, hot on the heels of one on Monday fromfellow industrial materials maker Cookson Group

, pushedother engineering companies to the top of the FTSE 100 fallerslist. GKN

, IMIand Melroseeach lost 2.3to 2.9 percent.The FTSE 100

was down 6.83 points or 0.1 percent at5,822.92 points by 1028 GMT, taking its losses for the week to0.8 percent. The mid-cap FTSE 250

fell 0.2 percent, ledby 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 wehad anticipated that trading would be tough in the second half,it's become clear in Europe and also in China that trading hastoughened through the third quarter and that is leading to areassessment of prospects for the full year," said DominicConvey, analyst at Peel Hunt.

Convey is reviewing his forecasts for the sector.

"Morgan is getting particularly hit today because it findsitself in the spotlight, but the sector is trading down insympathy, people are re-rating the sector."

Chinese data on Friday offered more proof of the slowdownhitting the world's biggest metals consumer, with bank lendingmissing forecasts in September.

For corporates,the one silver lining of the cloud would be if such data promptsChinese authorities to dole out more stimulus.

China has been an important growth market for UK companiesat a time of spending cuts at home and in Europe. In a freshblow for UK consumers, Centrica

, the owner of Britain'sbiggest energy supplier British Gas, said it will increasedomestic gas and electricity prices by 6 percent next month.

Shares in Centrica fell 0.7 percent.

The tough market conditions - with third quarter earningsamong Britain's large and mid-cap companies seen down on average7.4 percent year-on-year, according to Thomson Reuters Starmine- has increased the value of stock picking.

On Friday Hargreaves Lansdown stood out. The investmentmanager topped the FTSE 100 gainers with a 4 percent share pricerise after reporting record high assets and risingrevenues.

The firm is in a good position to benefit from a plannedoverhaul of how consumers are sold investment products fromJanuary.

"HL reports an excellent start to October," said SimonWillis, 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)

((antonina.vorobyova@thomsonreuters.com)(+44 207 5429828)(Reuters Messaging: antonina.vorobyova@thomsonreuters.com))


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