By Danilo Masoni
MILAN (Reuters) - The UK's top share index lagged other European markets on Monday as investors kept an eye on developments over Brexit from the ruling Conservative Party's annual conference.
Comments from Chancellor of the Exchequer Philip Hammond lifted the pound, weighing on shares in export-oriented firms, although gains among oil majors on rising crude prices provided support.
The FTSE 100 <.FTSE>, whose companies make 70 percent of their earnings from abroad, added 0.1 percent by 0832 GMT, while the domestically focused mid cap index <.FTMC> rose 0.7 percent.
"All eyes on sterling over the next few days as the pound will remain sensitive to news from the Conservative conference," said Peel Hunt economist Ian Williams.
Hammond said the UK had the fiscal capacity to cope with leaving the European Union without any agreement but believed the mood in Brussels was to reach a divorce deal.
His comments lifted the pound and that in turn sent shares in big multinationals BAT
Oil companies Shell
Airlines, which have recently been hit by rising oil prices which could increase their fuel costs, were under further pressure after a profit warning from Ryanair
Europe's largest low-cost carrier cut its forecast for full-year profit by 12 percent and said there could be worse to come if recent coordinated strikes across Europe continue to hit traffic and bookings.
Its London-listed shares fell 8.4 percent, wile FTSE-listed rivals easyJet
Housebuilders were another weak spot.
"The UK PM has plans to impose higher taxes on foreign buyers of UK properties, roughly half of all residential transactions in Central London, which could weigh on FTSE housebuilders," said at Accendo Markets analyst Mike van Dulken.
Among the smaller companies, Avocet Mining
(Reporting by Danilo Masoni; Editing by Raissa Kasolowsky)