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Britain's FTSE pulls back from 11-month closing high
July 19, 2016 / 3:50 PM / in a year

Britain's FTSE pulls back from 11-month closing high

* FTSE 100 flat at close

* Rio Tinto production update underwhelms

* Mining stocks top fallers

* Coca-Cola HBC gains after upgrade (Adds detail and updates prices at close)

By Kit Rees and Alistair Smout

LONDON, July 19 (Reuters) - Britain’s top share index steadied on Tuesday, easing back from an 11-month closing high, with mining stocks dropping after a production update from Rio Tinto.

Britain’s FTSE 100 was flat in percentage terms at 6,697.37 points at its close, after closing on Monday at its highest since August last year.

Rio Tinto’s decline was among the largest; it fell.5 percent after its latest update. Traders said that Rio Tinto’s second-quarter figures were a little disappointing, even as it reiterated its 2017 outlook.

“Growth in iron ore output decelerated from 13 percent year-on-year in Q1 to 8 percent in Q2 but production growth accelerated in bauxite, aluminium and also copper, which will do little to ease the market’s fears that key commodities could remain glutted for some time to come,” said Russ Mould, Investment Director at AJ Bell, in a note.

In all, FTSE 350 mining stocks dropped 2.4 percent, their biggest daily loss in a month.

Top riser on the FTSE 100 was Coca-Cola HBC, up more than 3 percent after the bottling company was upgraded to “overweight” from neutral by JP Morgan Cazenove.

“The soft drinks category is very resilient to macroeconomic volatility, which bodes well for CCH given current uncertainty in Europe,” analysts at JP Morgan said in a note.

“We believe CCH is well placed to take on additional bottling assets in key territories.”

Reflecting that uncertainty in Europe, the latest German ZEW showed a big fall in economic sentiment since Britain voted to leave the European Union nearly a month ago.

In a similar vein, the International Monetary Fund (IMF) cited Brexit-related uncertainty as it cut its global growth forecasts for the next two years.

However, the FTSE 100 is up 5.6 percent since the vote, with its substantial international exposure and defensive composition meaning it has weathered the period since the referendum better than major European indexes. (Reporting by Alistair Smout; Editing by Andrew Heavens, Larry King)

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