(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
* FTSE 100 up 0.2 pct
* Motor insurers hit by rate change
* London Stock Exchange slumps on merger disappointment
* Weak sterling supports index
* FTSE set to end the month higher
By Helen Reid
LONDON, Feb 27 Britain's major share index was
up on Monday, boosted by earnings updates and a weak sterling,
while motor insurers were hit by a regulatory change which could
lead to higher payouts, and merger disappointment weighed on LSE
The FTSE was up 0.2 percent by 0940 GMT. It was set
to end the month 2.2 percent higher, after having retreated last
Sterling fell to a 12-day low, supporting the
foreign-currency earning index higher.
Admiral and Direct Line were top fallers on
the index, down 4.5 to 7.4 percent.
The motor insurers were hit by the government's reduction of
a rate which discounts certain large motor claims. The Ministry
of Justice cut the discount rate to minus 0.75 percent from 2.5
"We expect today's change to lead to premium price
increases, in addition to those required to pass on ongoing
non-bodily injury claims inflation," UBS analysts said in a
Direct Line said it expected profit before tax to fall by
215-230 million pounds. Consultancy PwC said the
rate change would add 50 to 75 pounds to the average motor
Direct Line was headed for its worst day since June, while
Admiral was experiencing its heaviest losses since August.
Insurer Aviva was also down 1.1 percent.
London Stock Exchange was a top faller after its
plans to merge with Deutsche Boerse faltered. LSE said it
believed the European Commission is unlikely to provide
clearance for the merger with its German peer.
LSE shares were down 3.2 percent, headed for their worst day
since the Brexit referendum aftermath in June.
RBS was down 1.8 percent, maintaining Friday's move
down after the bank's results disappointed.
Outweighing the moves lower were steady gains led by Bunzl,
Convatec and Unilever.
Business supplies firm Bunzl posted better-than-expected
results, boosting it to the top of the FTSE, up 2.3 percent.
Convatec, the medical supplies company,
was also up 1.6 percent.
Unilever was gaining 1.5 percent. Near Friday's
close Chief Financial Officer Graeme Pitkethly said the Kraft
Heinz bid had been a "trigger moment" for Unilever to focus more
on short-term value creation.
Retailer ABF, which owns discount fashion brand
Primark, was down 0.7 percent after its results.
"Primark's subdued like-for-like and upcoming margin
headwinds are unlikely to prove conducive to continued near-term
valuation rebuild," said Jefferies analysts, who have a 'hold'
rating on the stock.
On the mid-cap index, bus operator National Express
was a top gainer, hitting a four-month high after Liberum, a
top-rated analyst for the stock, upgraded it to 'buy' from
'hold', citing diversification within public transport
operations as a positive for the company.
Premier Oil was the top gainer in the small-cap
index, up 10.9 percent. The oil company said it was making
progress over refinancing, in an update just before the close on
(Editing by Ed Osmond)