* FTSE 100 index falls 0.4 percent
* BP, Rexam down following new sanctions on Russia
* ITV gains after share purchase by Liberty
By Atul Prakash
LONDON, July 17 Britain's top share index
retreated on Thursday from a one-week high, with companies such
as oil major BP and can producer Rexam falling after Washington
targeted big Russian firms with new sanctions over Ukraine.
The blue-chip FTSE 100 index was down 0.4 percent at
6,761.04 points by 1414 GMT after hitting a week high in the
previous session, when mining companies took a boost from growth
data from China, the world's largest metals user.
BP, down 2 percent, took the most points off the FTSE
100 after the United States imposed the toughest sanctions yet
on Russia over what Washington says is Moscow's failure to curb
separatist violence in eastern Ukraine.
The targets included Russia's largest oil producer Rosneft
, in which BP owns 20 percent. Rosneft accounts for
around a quarter of BP's production.
"Investors are afraid that the tension could escalate
further. It's a concern for the market because Russia has said
it will also come with some announcements to punish America and
Europe. It's not good for sentiment," Frank Bonsee, equity sales
trader at ABN AMRO, said.
Rexam, which generates about 7 percent of its total
revenue from Russia, fell 3.4 percent. A downgrade by Deutsche
Bank to "hold" from "buy" on factors including stretched
valuations also added to the selling pressure.
"Geopolitical worries continue to make the headlines ...
That combined with the summer doldrums means that there is no
rush to get involved buying stocks," said Lex van Dam, a hedge
fund manager at Hampstead Capital.
Some other individual companies also added to the market's
weakness. Britain's biggest sporting goods retailer, Sports
Direct, posted a 20 percent rise in full-year profit and
said it had made up with Adidas AG after a row over
supplies of soccer boots and shirts.
But its shares fell 1.8 percent, with analysts saying that
the stock was not cheap given the uncertainties regarding Adidas
and corporate governance. The Sports Direct board has wrestled
for years over bonus payments to founder Mike Ashley.
The index's losses were capped by some strong gainers. ITV
surged 5.6 percent after cable group Liberty Global
bought a stake in the free-to-air broadcaster from
ITV's biggest shareholder BSkyB, sparking speculation of
a full takeover.
"ITV is now likely to be seen as a potential M&A story,"
analysts at Liberum wrote in a note. "We would not expect an
immediate bid: but Liberty's purchase suggests it may be
interested in acquiring the asset at some point."
ITV's trading volumes were more than five times its 90-day
daily average, against just 50 percent of the 90-day average for
the FTSE 100 index.
Analysts said the market was also pausing after strong gains
in recent sessions and waiting for earnings announcements from
companies such as British land, ARM Holdings
and GlaxoSmithKline in the coming sessions.
"It's not surprising that people would use the earnings
season to take some profits when the earnings numbers have been
somewhat mixed," Graham Bishop, senior equity strategist at
Exane BNP Paribas, said.
(Additional reporting by Tricia Wright; Editing by Mark