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UK's main index sees seventh straight day of losses, BoE comments lift midcaps

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07/12/2019 | 12:37pm EDT
A worker shelters from the rain as he passes the London Stock Exchange in London

(Reuters) - London's FTSE 100 saw its seventh day in the red on Friday, its longest losing streak since 2015, led lower by losses in pharmaceuticals after the U.S. White House scrapped a rebate rule, while the midcap bourse jumped on prospects of lower interest rates.

The UK's blue-chip index edged 0.1% lower after trading in positive territory for most of the session as its more internationally-exposed constituents such as miners climbed on hopes of an interest rate cut by the U.S Federal Reserve.

The mid-cap FTSE 250 <.FTMC>, however, saw a 0.6% rise as a Bank of England official said that the BoE might need to cut interest rates almost to zero after a no-deal Brexit.

The BoE comments helped cap losses on the main index as well with blue-chip housebuilders Persimmon and Barratt rising on rate cut hopes.

Pharmaceutical heavyweights AstraZeneca and GlaxoSmithKline were among the biggest drags on the main index, tracking shares in their U.S. peers after the Trump administration pulled the rebate rule.

Exporter stocks such as spirits company Diageo also weakened along with the dollar, which has been pressured by growing bets that the Fed would cut interest rates at a policy meeting later this month.

Among small caps, Thomas Cook plummeted nearly 60% to an all-time low after it proposed a bailout that would hand control of its packaged-tour business to largest shareholder Fosun Tourism and would significantly dilute stakes of existing shareholders.

The world's oldest tour operator has been battling fading demand for packaged holidays and high debt, and traders said shares were being hammered as investors had been hoping Fosun would buy out the entire company.

Markets.com analyst Neil Wilson said several questions about how the refinancing deal would impact a proposed sale of the airline business also remained.

Hiscox ended the day with a 2.1% drop, after having fallen as much as 6% after the insurer warned of continued deterioration in the market.

Among big risers on the midcap index was cybersecurity firm Sophos Group, which jumped 5.4% after reporting higher first-quarter adjusted earnings and revenue on subscription growth.

Small-cap Lookers, whose shares have almost halved in value this year as the car dealership chain battles weaker car demand in Britain, dropped another 8% after it warned on annual profit.

(Reporting by Shashwat Awasthi and Muvija M in Bengaluru; Additional reporting by Shariq Khan; Editing by Bernard Orr and Frances Kerry)

By Shashwat Awasthi and Muvija M

Stocks mentioned in the article
ChangeLast1st jan.
ASTRAZENECA -0.16% 6380 Delayed Quote.8.63%
BARRATT DEVELOPMENTS 1.48% 644 Delayed Quote.39.02%
FOSUN TOURISM GROUP End-of-day quote.
GLAXOSMITHKLINE 0.50% 1654.6 Delayed Quote.10.96%
HISCOX LTD -0.29% 1718 Delayed Quote.5.98%
LOOKERS PLC 0.33% 45.6 Delayed Quote.-50.76%
PERSIMMON 2.84% 2030 Delayed Quote.5.18%
SOPHOS GROUP PLC 0.35% 455 Delayed Quote.20.18%
THOMAS COOK GROUP -0.04% 4.712 Delayed Quote.-84.68%
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