* FTSE 100 down 0.6 pct
* Miners fall on weaker copper price
* Downgrade weighs on Lloyds
* Babcock down after contract termination
* Exova rises after takeover bids
(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)
By Kit Rees and Helen Reid
LONDON, March 27 Britain's top share index hit a
one-month low after the failure of U.S. President Donald Trump
to push his healthcare reforms through Congress hit mining
shares and Babcock fell after exiting a contract.
The blue chip FTSE 100 index closed down 0.6 percent
at 7,293.50 points, slightly underperforming the broader
negative European market.
On Friday, Republican leaders pulled legislation to overhaul
the U.S. healthcare system, a 2016 election campaign promise of
Trump and his allies, putting into question Trump's ability to
deliver on his other promises, such as tax reform.
The rally in global equity markets since Trump's election
has been driven by a reflation trade, on the hope for increased
infrastructure spending and tax cuts.
"The agenda is quite badly dented now – (Trump has) got a
lot of consensus building to do," Ken Odeluga, market analyst at
City Index, said.
"That’s going to delay his ability to be really, really
effective in terms of pushing through tax reform and
pharmaceuticals reform and certainly will delay coming back for
another bite of this healthcare reform," Odeluga added.
The FTSE's mainly foreign-earning stocks were also hit by a
stronger pound which jumped almost 1 percent to an eight-week
high against the dollar, gaining with other major currencies
after the policy flop.
British miners were among the biggest large cap
fallers, with Glencore, Anglo American and
Antofagasta all dropping between 3.9 to 4.7 percent as
the price of copper slipped for a second day.
Among the handful of risers, Astrazeneca was up 0.9
percent after it won approval for its lung cancer pill Tagrisso
in China, a key market.
Berenberg's downgrade on Lloyds to "sell" from
"hold" sent the shares 1.6 percent lower, with analysts saying
the bank is riskier than perceived and that risks
from cyclical loan losses are highly skewed.
Babcock International also declined, down 4.3
percent after the engineering outsourcer said it had reached a
mutual agreement with the UK to terminate the Magnox nuclear
decommissioning contract in 2019.
Outside of the blue chips, shares in car dealer Inchcape
rose 4.7 percent after BNP Paribas upgraded its rating
on the stock to "outperform" from "neutral".
"The macro backdrop has improved and there would now look to
be upside risk to the demand environment," said BNP analysts.
"Currency has turned from a headwind to tailwind. Management
have iterated a credible self-help programme to support earnings
progression. M&A has moved from optionality to reality."
Exova was a top small-cap gainer, posting its best
ever daily gains, up 14.2 percent after the materials testing
firm said it got proposals for cash offers from firms including
Element Materials Technology, PAI Partners and Jacobs Holding
(Reporting by Kit Rees; Editing by Janet Lawrence/Ruth