* FTSE 100 down 0.1 percent
* Engineers hit by profit warnings in sector
* Chinese data illustrates slowdown
LONDON, Oct 12 (Reuters) - Britain's FTSE 100 eased on
Friday, with a second profit warning in a week from the
engineering sector underscoring concerns about the health of
third quarter earnings in the face of slowing global and
domestic demand.
Mid-cap Morgan Crucible fuelled concerns about
slowing growth in China, blaming that and weak demand in Europe
as it said full-year results could be significantly below its
expectations and unveiled plans to cut jobs.
The profit warning, hot on the heels of one on Monday from
fellow industrial materials maker Cookson Group, pushed
other engineering companies to the top of the FTSE 100 fallers
list. GKN, IMI and Melrose each lost 2.3
to 2.9 percent.
The FTSE 100 was down 6.83 points or 0.1 percent at
5,822.92 points by 1028 GMT, taking its losses for the week to
0.8 percent. The mid-cap FTSE 250 fell 0.2 percent, led
by an 11 percent drop in Morgan Crucible in heavy volumes,
already at nearly three times the 90-day daily average.
"The screen would tell you it's pretty serious. Whilst we
had anticipated that trading would be tough in the second half,
it's become clear in Europe and also in China that trading has
toughened through the third quarter and that is leading to a
reassessment of prospects for the full year," said Dominic
Convey, analyst at Peel Hunt.
Convey is reviewing his forecasts for the sector.
"Morgan is getting particularly hit today because it finds
itself in the spotlight, but the sector is trading down in
sympathy, people are re-rating the sector."
Chinese data on Friday offered more proof of the slowdown
hitting the world's biggest metals consumer, with bank lending
missing forecasts in September. For corporates,
the one silver lining of the cloud would be if such data prompts
Chinese authorities to dole out more stimulus.
China has been an important growth market for UK companies
at a time of spending cuts at home and in Europe. In a fresh
blow for UK consumers, Centrica, the owner of Britain's
biggest energy supplier British Gas, said it will increase
domestic gas and electricity prices by 6 percent next month.
Shares in Centrica fell 0.7 percent.
The tough market conditions - with third quarter earnings
among Britain's large and mid-cap companies seen down on average
7.4 percent year-on-year, according to Thomson Reuters Starmine
- has increased the value of stock picking.
On Friday Hargreaves Lansdown stood out. The investment
manager topped the FTSE 100 gainers with a 4 percent share price
rise after reporting record high assets and rising
revenues.
The firm is in a good position to benefit from a planned
overhaul of how consumers are sold investment products from
January.
"HL reports an excellent start to October," said Simon
Willis, analyst at Daniel Stewart.
"It is well placed ahead of the Retail Distribution Review
(RDR), with a competitive fee structure that is ready to go."
(Reporting by Toni Vorobyova; Editing by Anthony Barker)
