Britain's FTSE falls as concern grows over violence in Iraq

Wed Jun 25, 2014 6:49am EDT

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LONDON, June 25 (Reuters) - UK shares fell on Wednesday, mirroring losses across European markets and an overnight retreat in the U.S. and Asia as escalating violence in Iraq spooked investors.

London's FTSE 100 benchmark index was down 0.6 percent at 6,744.29 points by 1026 GMT. Year-to-date, the index is broadly flat but still hovering around seven-year highs.

Europe's FTSEurofirst 300 also shed 0.6 percent.

Security forces are fighting rebels for control of Iraq's biggest oil refinery and despite the fact that the Brent crude oil price lost ground, equity traders were concerned enough about the situation to take money off the table, with risk-sensitive mining stocks among the hardest hit.

"In the absence of anything more fundamental ... Iraq unfortunately is front and centre," Hargreaves Lansdown head of equities Richard Hunter said.

"The thing with the Iraq situation is that it could have further ramifications particularly if the likes of the U.S. and the UK decide to get involved - particularly militarily. That's the kind of thing that really gives investors the jitters."

Meggitt, a manufacturer of aircraft parts, was among the worst performers on the FTSE 100, down 2.8 percent after a downgrade from JPMorgan.

But drug company Shire, which is defending itself from a $46 billion approach by U.S. group AbbVie, saw its shares gain 0.7 percent after it said a U.S. court had endorsed its patents on top-selling hyperactivity drug Vyvanse.

And commercial-property firm Land Securities rose 0.3 percent after saying it had acquired a 30-percent stake in Bluewater, Kent for 656 million pounds ($1.1 billion).

"An interesting, significant acquisition ... that moves the focus of (Land Securities') retail portfolio towards more dominant centres," analysts at Oriel Securities wrote in a note to clients. (Reporting by Tricia Wright and Lionel Laurent; Editing by Louise Ireland)

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