* FTSE 100 index falls 0.4 percent
* Admiral falls 6.7 percent after update
* Aviva falls on concerns about turnaround plan
By Atul Prakash and Tricia Wright
LONDON, July 9 Britain's top share index fell
for a third straight session to a two-month low on Wednesday,
with UK car insurer Admiral sinking after a downbeat
Shares in Admiral dropped 6.7 percent, making it the top
decliner on the blue-chip FTSE 100 index, after the
company said revenues fell in the first half of the year and
there was no firm evidence of a return to growth in UK car
The company said it planned to launch its first ever bond,
of up to 200 million pounds ($340 million), to diversify its
capital base and help it prepare to meet Solvency II regulations
Oriel Securities repeated its "sell" rating on the stock,
while Berenberg said a likely fall in margins was not reflected
in current consensus earnings forecasts.
"The market will be surprised that Admiral sees a need to
raise debt," Berenberg analyst Peter Eliot, said.
"With the company forecasting falling margins and showing
falling turnover, we believe these earnings forecasts will have
to come down."
Trading volume in Admiral was robust, with 144 percent of
its 90-day daily average volume recorded by midday, against just
29 percent for the FTSE 100 index.
Aviva was another big casualty, off 3.7 percent. The
UK insurer said it aimed to double the amount of excess cash it
generates during the next stage of a turnaround plan, but its
shares fell on concerns the plan did not go far enough.
The UK benchmark index was down 0.4 percent at 6,709.35
points by 1025 GMT, having suffered its biggest one-day
percentage fall since March on Tuesday, when it fell 1.25
"It feels like there's really negative sentiment; people are
worried about earnings... I think we'll see a couple of days of
selling," Joe Rundle, head of trading at ETX Capital, said.
Airlines, which slid in the previous session following a
profit warning from Air France-KLM, recovered some
ground as traders deemed the weakness to be overdone.
EasyJet climbed 3.4 percent to top the FTSE 100
leader board, while British Airways owner International
Consolidated Airlines Group rose 1.3 percent.
While U.S. aluminium company Alcoa kicked off the
latest reporting season with quarterly results that beat
analysts' expectations, investors were doubtful that would be
enough to give a big fillip to the FTSE, hovering around
"There's been increasing caution ahead of the earnings
season ... It needs to be a fairly strong season ... for indexes
to maintain their current strength," Richard Hunter, head of
equities at Hargreaves Lansdown, said.
Also weighing on the FTSE 100 were stocks trading without
the attraction of their latest dividend, namely Coca-Cola HBC AG
and Next. They knocked 1.06 points off the
(Reporting by Atul Prakash; Editing by Ruth Pitchford)