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* FTSE 100 closes down 0.5 pct, just below 7,000 points
* EasyJet falls after profit warning
* FTSE 100 up 12 pct in 2016, near record highs
By Sudip Kar-Gupta
LONDON, Oct 6 Britain's top shares index fell on
Thursday, although it remained near record highs, with budget
airline easyJet sliding lower after issuing a profit
The blue-chip FTSE 100 index closed down 0.5 percent
at 6,999.96 points - still near its record intraday high of
7,122.74 points reached in April 2015.
EasyJet fell 6.9 percent after the company warned its profit
would fall by more than 25 percent this year, saying security
issues had dampened demand while low fuel prices meant there was
more competition in the European short-haul market.
"We cut 2017 estimated pre-tax profit by 11 percent to 405
million pounds ($512.20 million) as pricing continues to
suffer," said Credit Suisse analyst Neil Glynn, in a note on
easyJet. Glynn kept a "neutral" rating on easyJet shares.
The FTSE 100 rose to a 17-month high earlier this week and
is up by 12 percent so far in 2016.
The Bank of England's decision in August to cut interest
rates to record lows of 0.25 percent has propped up the FTSE 100
and enabled it to recover from an initial slump in late June
after Britain's shock "Brexit" vote to quit the European Union.
Rock-bottom rates have hit returns on bonds and cash,
driving investors to the better returns available from stocks.
The FTSE 100's international companies have also benefited
from a fall in sterling this week. Many of these companies earn
much of their revenues in U.S. dollars and therefore get a
currency-related accounting lift as those dollars are converted
back to pounds.
However, the slump in sterling has also impacted the U.S.
dollar value of FTSE 100 stocks, a potential negative for
overseas investors for whom the dollar is their benchmark
Roderic Owen-Thomas, director at London-based firm Mayfair
Capital Limited, expected the FTSE 100 to make little progress
for the rest of 2016, given underlying concerns over Brexit.
"We feel that most of the upside is complete for this year,"
($1 = 0.7907 pounds)
(Additional reporting by Atul Prakash; Editing by Janet