* Smiths Group falls 6.1 pct after lower profits
* FTSE 100 edges down in mid-session trading
* Market awaits Osborne's budget speech
By Sudip Kar-Gupta
LONDON, March 19 A slump in the shares of
engineering company Smiths Group weighed on Britain's
top equity index on Wednesday, as Smiths joined a list of
companies affected by the strength of sterling.
The blue-chip FTSE 100 index, which rose 14.4
percent in 2013 and was close to a 13-year high in January,
slipped by 0.1 percent, or 5.87 points, to 6,599.41 points in
Smiths Group plunged 6.1 percent, making it the
worst-performing blue chip in brisk trade after it said
first-half profits fell 3 percent due to a strong pound that
reduced the U.S.-dominant manufacturer's margins.
"Investors in Smiths Group can be forgiven for feelings of
exasperation and even despair this morning. It just isn't doing
what it says on the tin," said Steve Clayton, equity research
partner at Mirabaud Securities.
A gradual recovery in the British economy has propped up
sterling, but a stronger currency risks hurting companies
Investors were waiting for British finance minister George
Osborne's annual budget later in the day, with some analysts
noting that any reaction in sterling could affect the stock
"Sterling strength has been quite a big factor in the
downgrades that we've seen, particularly from some of the FTSE
100 more globally exposed stocks ... if that could continue to
reverse that would probably be quite helpful for sentiment,"
Peel Hunt equity strategist Ian Williams said.
The FTSE is down by around 2 percent since the start of
2014, but many traders expect the stock market to recover later
this year to hit a record high of 7,000 points as the UK's
economic recovery continues.
"We're still in an uptrend for now. I expect record highs to
come mid-April or early May," said JNF Capital trader Rick
(Additional reporting by Tricia Wright; Editing by Susan