Commodities drag Britain's FTSE as trade worries dull risk appetite

LONDON: The UK's top share index fell on Thursday as shares in banks and commodities-related stocks dropped amid lingering concerns over global trade, with more defensive plays in demand ahead of an EU summit.

The blue chip FTSE 100 index was down 0.2 percent at 7,606.24 points by 0909 GMT, while mid caps declined 0.4 percent.

Though British shares have enjoyed a respite over the past two sessions from the selling pressure, worries over U.S.-China trade and the beginning of a tense EU summit contributed to the subdued mood ahead of the end of the quarter.

"We seem to be hanging on the coattails of everything the White House says," said Ken Odeluga, market analyst at City Index.

"The international flavour of the shares on the FTSE .... means that it should be very much impacted in the same way that you would expect large U.S. corporates on the S&P 500, the Dow Jones, to be impacted," Odeluga added, pointing to the fact that the FTSE is on track for a small loss for June.

Stocks in so-called 'safe-haven' sectors were in demand, with consumer staples and health stocks rising.

Many of these big, international stocks were also boosted by a fall in sterling, as they earn the bulk of their revenues in dollars. Shares in Diageo, Imperial Brands and Reckitt Benckiser all rose between 0.2 percent to 1.2 percent.

Pharma firm Shire was among the biggest FTSE gainers, up 2.2 percent at a one-month high after a group which was trying to rally support to block Takeda's acquisition of Shire failed to get its proposal passed at Takeda's annual meeting.

Sectors more exposed to the economic cycle, however, such as materials, energy and financials, wiped the most points off the FTSE 100. A retreat in underlying metals prices and a breather in crude's climb knocked back commodity-related sectors.

Banks have been under particular pressure given that their shares tend to see bigger swings than the rest of the market.

Among smaller companies, stocks exposed to the UK consumer were once again on the back foot as shares in pub operator Greene King tanked 7.7 percent following its full year earnings.

Greene King reported a drop in pretax profit on the back of softer consumer spending, higher costs and bad weather at the start of the year.

Stagecoach fell more than 2 percent after cutting its dividend after annual profits fell, taking a hit from the failure of the East Coast rail contract.