* FTSE 100 down 0.6 pct on day, up 2.8 percent in Q1
* Fourth straight quarter of gains
* South Africa-facing stocks fall after fin min sacked
* Old Mutual, Investec see biggest drop since Dec 2015
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By Kit Rees and Helen Reid
LONDON, March 31 Britain's top share index fell
on Friday but completed its fourth successive quarter of gains,
the best such winning streak since 2011.
The blue-chip FTSE 100 rose 2.8 percent over the
first three months of 2017, though incipient Brexit negotiations
raised some doubts over whether above-average valuations could
On the day, it was down 0.6 percent, weighed down by South
Africa-exposed stocks after President Jacob Zuma sacked finance
minister Pravin Gordhan, causing a slump in the rand.
The FTSE's foreign-earning firms have benefited from a
weaker pound since Britain's vote to leave the European Union in
June 2016, pushing the index up to record highs, with the latest
set earlier this month.
But the FTSE has underperformed European peers this quarter,
partly due to the pound, which posted its first quarterly gains
in six quarters.
Britain's more domestically exposed mid caps posted
a 4.9 percent gain for the quarter, their third straight
"It's been a fairly decent performance this quarter when you
consider all the headwinds," said Michael Hewson, market analyst
at CMC Markets.
"It looks mildly encouraging for the second quarter," he
added, listing the main concerns for the coming months as French
elections and uncertainty surrounding U.S. President Donald
The start of Britain's long divorce process from the
European Union spelled uncertainty ahead, though Hewson noted a
further weakening of the pound in the event of hard-ball
negotiating tactics could push British equities up to new highs.
The FTSE trades at 14.6 times forward earnings versus a
10-year average of 12 times, according to Thomson Reuters data.
On the day, shares in South Africa-facing insurer Old Mutual
slumped 7.5 percent, the top blue-chip faller, after
Zuma dismissed the respected Gordhan, sending the rand and
government bonds lower.
Both Old Mutual and asset manager Investec posted
their worst losses since December 2015, when Zuma's sudden
sacking of then-finance minister Nhlanhla Nene sent South
African assets tumbling.
Mondi and Mediclinic, also exposed to
South Africa, fell 2.5 and 6.2 percent.
"They're all exposed to the South African rand, and whenever
you have turmoil down there, such as Zuma firing the finance
minister, the rand ... weakens," said Mike van Dulken, head of
research at Accendo Markets.
Miners also put pressure on the index, as Anglo American
, BHP Billiton and Rio Tinto fell between
2.3 percent and 3.1 percent, tracking metals prices
There were more dramatic moves among British mid caps
, which overall fell 0.1 percent, with Investec down 9.9
Shares in life sciences and tech investor Allied Mind
were down 4.9 percent, hit by a double downgrade from
Jefferies which cut the stock to "underperform" from "buy", with
analysts saying that writedowns of assets seem more likely than
sudden value uplifts.
Challenger bank Shawbrook rose to its highest level
in more than a year, up 9.8 percent after receiving a formal
buyout offer for 842.4 million pounds ($1.05 billion) from
private equity firms Pollen Street Capital and BC Partners.
Shawbrook has previously rejected the same proposal, then
valued at 825 million pounds.
"We still think this represents a huge undervaluation, but
given poor performance by management in defence so far, we would
expect this to get done," Gary Greenwood, analyst at Shore
Capital, said in a note.
(Reporting by Kit Rees and Helen Reid; Editing by Mark