* FTSE 100 down 0.7 pct
* Strong services PMIs boost sterling
* Financials suffer as RBS slips on stake sale
* Johnston Press slumps 17.6 pct after profit warning (Adds closing prices)
By Helen Reid
LONDON, June 5 (Reuters) - Royal Bank of Scotland weighed on Britain’s FTSE 100 on Tuesday after the government took a loss selling a stake in the bank, while a rising pound after strong services data piled extra pressure on the internationally-exposed index.
The top share index closed down 0.7 percent as strong data in the services sector pushed sterling higher and weighed on dollar earners.
Shares in RBS fell 5.1 percent after the government sold 7.7 percent of the lender for 2.5 billion pounds ($3.33 billion), realizing a loss of $2.66 billion.
The drop in RBS shares dragged on the financials sector, the biggest weight on the FTSE. HSBC, Lloyds and Barclays fell between 1 percent and 3 percent.
Cruise and travel company Carnival posted the worst performance and lost 6.2 percent.
Morgan Stanley travel and leisure analysts cut their EPS forecasts for the stock by 11 percent, saying higher oil prices would cause fuel costs to ratchet up for the firm.
“We remain relatively cautious on the cruise lines given the high and increasing level of industry supply growth, slowing yield momentum and weakness in the Caribbean and China (both critical markets for supply absorption),” they wrote in a note.
British airways owner IAG fell 3.4 percent after the company’s CEO said air traffic control strikes were more of a threat to European airlines in 2018 than a rise in fuel prices.
WPP shares were also hit by a broker note and fell 3 percent after Berenberg cut it to “sell”.
Johnston Press shares sank 16.3 percent to a record low after the publishing firm said European changes to data privacy rules were hitting its online advertising revenue, describing the trading environment as “extremely challenging”. (Reporting by Helen Reid, editing by Louise Heavens and Richard Balmforth)