Britain's FTSE falls as emerging market weakness dents Diageo
* FTSE 100 falls 0.1 pct
* Diageo sales growth slows due to EM weakness
* BSkyB, Shell reassure with company updates
LONDON, Jan 30 (Reuters) - British blue-chip shares fell for the seventh time in eight sessions on Thursday, led lower by Diageo after it flagged weakness in emerging markets.
The FTSE 100 index was down 0.1 percent, or 8.95 points, at 6,535.33 by 1543 GMT, nearing its lowest level since mid-December. It has suffered in recent sessions from a selloff in emerging markets that continued on Thursday.
Shares in Diageo dropped 4.5 percent, taking the most points off the FTSE, after the world's biggest distilled spirits company reported slower net sales growth due to weakness in China, Thailand and Nigeria.
Diageo had revealed similar struggles last October in markets such as Turkey and Russia.
"Diageo will be very disappointed with Asian sales, as they were looking to tap into demand from those growing markets for the more chic spirits," said Alastair McCaig, analyst at IG.
Peer SABMiller also fell, by 1.4 percent, and other consumer staple stocks dropped on expectations that emergings market turmoil, which hit earnings in the summer of 2013, would again hit their results.
Social unrest and currency problems in emerging markets such as Thailand, Turkey and Argentina have knocked back global equities this week, accentuated by the U.S. Federal Reserve's decision to trim its stimulus programme further.
"Emerging markets are a concern, certainly in the short term. We've been down this road before, however, and there won't be as big a reaction as the global economy is in a good enough shape this time around to take us out of the mire," said Mike McCudden, head of derivatives at Interactive Investor.
"Companies that do have big exposure to emerging markets, such as Diageo, will be impacted, but as a company it is well placed to get through it."
Despite concerns over emerging markets, many investors still expect the FTSE to eventually hit a record 7,000 points in the first quarter, helped by signs of a gradual rebound in the British and world economies.
Among top gainers were BSkyB and Royal Dutch Shell after they delivered reassuring earnings reports, in contrast to Diageo.
Shell's report included steps to improve returns after a profit warning two weeks ago knocked its stock price.
So far this earnings season, 87 percent of those companies on the FTSE 100 who have reported results have met or beaten expectations, although some reports had been preceded by profit warnings.
"Earnings are coming in line or beating expectations as a whole, but there is a lot of guidance that is considerably less confident. It's more than just downplaying expectations, as a lot of companies seem genuinely worried," IG's McCaig said.
The latest profit warning came from embattled mid-cap outsourcer Serco, which fell 17.3 percent after saying profit could be as much as 20 percent below forecasts, also sending blue chip peer G4S 3.2 percent lower.
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