By Helen Reid
LONDON (Reuters) - Britain's top stock index tumbled on Tuesday, lagging European peers as sterling's climb dragged multinational exporters' shares down, while weak results weighed on Legoland owner Merlin.
The FTSE 100 <.FTSE> was down 0.3 percent by 0835 GMT, extending early losses after strong employment figures sent sterling higher.
The currency had strengthened ahead of Wednesday's EU summit at which some traders remain hopeful of a breakthrough in Brexit negotiations.
Workers in Britain are seeing the fastest pay growth in nearly a decade, figures from the Office for National Statistics showed, boosting the currency further and weighing on the FTSE 100 dominated by dollar-earning international stocks.
British American Tobacco
The fall, although small, weighed heavily on the FTSE 100 as BAT is among its biggest constituents by market cap.
BAT's statement again sparked uncertainties around a shift to heated tobacco products and e-cigarettes as companies try to maintain revenue growth as cigarette consumption falls.
Heavyweight oil majors Shell
Online grocer Ocado
Shares in rival supermarket Tesco
Overall analysts were sharply downgrading FTSE 100 earnings estimates as the results season began in earnest.
"The earnings season will be vitally important to UK indices given the nervous sentiment around the Brexit outcome and health of the broader European growth story," said Edward Park, investment director at Brooks Macdonald.
Mid-caps saw the biggest moves as earnings flowed in, though the FTSE 250 managed a 0.5 percent rise overall.
"The company is holding guidance but the shape changes with lackluster Legoland performance and increased cost inflation, partially offset by better than expected Resort Theme Park trading," wrote Liberum analysts.
The homebuilder, among Britain's top 5 by market value, said it was mindful that Britain's forthcoming exit from the European Union could hit consumer confidence in the busy spring selling season and also of rising pressures on building costs.
(Reporting by Helen Reid, Editing by Keith Weir)