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* FTSE 100 index ends 0.6 pct lower
* Tesco soars after strong results
* United Utilities retreats after downgrade
By Kit Rees and Atul Prakash
LONDON, Oct 5 Britain's top share index
retreated on Wednesday after reaching to a near-record high in
the previous day, with miner Polymetal slumping
following concerns about its dividend payout and United
Utilities hit by a broker downgrade.
However, Tesco shares surged after its results.
Russia's Polymetal fell 5.7 percent, the worst performer in
the FTSE 100 index, after saying that it would decide on whether
to pay a special dividend on 2016 results, depending on gold
price in the fourth quarter.
The miner was also hit by weaker gold prices, which
resulted in a 4 percent and 2.8 percent fall in shares of
Randgold Resources and Fresnillo respectively.
"Given the collapse in the gold price, the shares of gold
miners are understandably under pressure," Jasper Lawler,
analyst at CMC Markets, said.
United Utilities dropped 4.4 percent after RBC
Capital Markets downgraded its rating to "underperform".
The-blue chip FTSE 100 closed 0.6 percent lower. It
rose 1.3 percent on Tuesday after coming within striking
distance of its lifetime high, reached in April last year,
following a further drop in the pound.
Tesco finished 9.8 percent stronger after hitting a
14-month high and recording its best one-day gain since January
2015 as Britain's biggest retailer reported a 60 percent rise in
first-half profit and lifted its margin target.
Tesco also said it would increase investment in its stores
and distribution network to boost profitability over the next
"The green shoots of recovery continue to sprout at Tesco,"
Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
Barclays raised its target price for the stock, saying that
the clear beat on first-half profit and the very welcome
guidance means the share price was expected to build on its
already strong performance.
The FTSE 100 index is up 12 percent so far this year. It hit
an 18-month high in the previous session and breached the 7,000
point level for the first time since mid-2015 as sterling
dropped on fears that a "hard" Brexit from the European Union
could hurt the economy.
The FTSE 250 index also rallied and hit a record
high a day earlier, before falling 0.8 percent on Wednesday.
(Editing by Alison Williams)