* FTSE 100 index falls 0.4 percent
* Diageo, easyJet down as trade ex-divs
* United Utilities hurt by Morgan Stanley downgrade
By Atul Prakash
LONDON, Feb 26 Britain's top share index fell
for a second straight session on Wednesday, with Diageo and
easyJet falling after trading without their latest dividend
entitlements and United Utilities hurt by a downgrade from
Diageo and easyJet fell 1.5 percent and 0.8
percent respectively as investors will no longer qualify for the
latest dividend payout. According to Reuters calculations, the
effect of the resulting adjustment to prices by market-makers
have taken 2.7 points off the FTSE index.
United Utilities dropped 1.7 percent, with traders
citing a Morgan Stanley note downgrading the stock to "equal
weight" from "overweight" and dropping the company from its
"Europe Best Ideas" list.
The blue-chip FTSE 100 index was down 0.4 percent at
6,803.72 points by 0905 GMT following a drop of 0.5 percent in
the previous session, further retreating after closing at its
highest level in 14 years on Monday.
"Investors have become cautious as they think the market is
due for a correction after rising too far, too fast. They are
waiting for some catalysts before pushing the FTSE 100 towards
record highs," Tom Robertson, senior trader at Accendo Markets,
said, adding the market focus will be on UK GDP figures.
"If we test 6,850, then we could be set for higher highs and
the next target would be the all time high of 6,950.60. But if
we fail to break through the 6,850 level in the near-term, the
market would become vulnerable to more profit taking."
The FTSE 100 also came under pressure due to a sharp decline
in ITV shares after a special dividend of 161 million
pounds ($268 million) following a 9 percent rise in 2013
external revenues by Britain's largest free-to-air broadcaster
failed to cheer investors.
"The update was good, but (shares are) down on the basis of
no major upgrades and a special dividend that could have been
higher," a London-based trader said.
Bucking the trend, engineering firm Weir Group rose
4.2 percent after saying it expected to return to growth this
year by focusing on a possible rise in customers' upstream
investments in North America and the Middle East.