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STOCKS NEWS EUROPE-Morgan Crucible leads engineers down after warning

Shares in London-listed engineering firms fill out the top FTSE350 faller list, led by Morgan Crucible , down 11 percent after the maker of carbon, ceramics and other advanced materials warns on profit.

Morgan Crucible, which supplies industries including rail and defence, says demand has slowed down across its markets in the third quarter, with Europe and China particularly hard hit.

The warning, just a few days after fellow industrial materials maker Cookson

also said it would miss forecasts, sends shivers down the engineering sector.

Testing equipment firm Spectris , due to update on trading next Friday, drops 4.9 percent, aerospace engineers Senior and Bodycote

fall 3.6 percent and 3.1 percent respectively, industrial equipment company Spirax-Sarco slides 2.8 percent, conveyor belt maker Fenner

falls 2.7 percent and plane parts maker GKN , scheduled to update the market on Tuesday, is down 2.7 percent.

Meanwhile, pumps and valve supplier IMI tops the FTSE100 fallers, down 2.76 percent.

Morgan Crucible's shares have been slipping since the Cookson warning, but analysts say the company statement is worse than they feared.

"Today's profit warning...is more severe than our low ball expectations," says Panmure Gordon, putting its forecasts under review.

"The short term looks depressing but is exaggerated by temporary supply chain weakness."

Jefferies says, with the exception of robust net debt, there "are few crumbs of comfort to be had" and says it expects full-year consensus forecasts for Morgan Crucible to come down at least 10 percent.

To see a story on Morgan Crucible please click on Reuters messaging rm://rosalba.obrien.reuters.com@reuters.net

Keywords: MARKETS EUROPE STOCKSNEWS