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FTSE slips on ex-div trading, U.S.-China trade doubts

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By Reuters
FTSE slips on ex-div trading, U.S.-China trade doubts
FILE PHOTO: A broker looks at financial information on computer screens on the IG Index the trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson/File Photo   -   Copyright  SIMON DAWSON(Reuters)

By Shashwat Awasthi

(Reuters) – London’s FTSE 100 retreated from a near four-month high on Thursday, weighed down by a handful of stocks trading ex-dividend, subdued U.S.-China trade deal hopes and a firmer pound.

The blue-chip index <.FTSE> fell 0.4% by 0841 GMT with Vodafone <VOD.L> and chemicals firm Johnson Mathey <JMAT.L> shedding over 3% each, as they traded without entitlement to a dividend pay-out.

The FTSE 250 <.FTMC> once again climbed to a near 1-1/2 year high, rising 0.1%. Virgin Money UK <VMUK.L> soared 20% after provision for claims related to the PPI mis-selling scandal were in line with its estimates.

Shares of the Clydesdale and Yorkshire Bank owner were on track for their best day on record. Though traders were initially sceptical of its decision to suspend dividend, one of them later said it may have been the “right step to take”.

Trading volumes on both indexes were thin with U.S. markets shut for Thanksgiving.

The FTSE 100 underperformed the European benchmark <.STOXX>, as firms that book a major chunk of earnings in U.S. dollars, including BAT <BATS.L> and AstraZeneca <AZN.L>, weighed.

Sterling has been buoyed by polls that predict a Conservative Party victory in the upcoming British general election. A YouGov poll showed Prime Minister Boris Johnson on course to secure a majority.

“The reason this poll, amongst all the others, carries so much weight, is that it correctly predicted the hung parliament of the last election,” OANDA analyst Jeffrey Halley said.

“Markets do like certainty, and the YouGov poll, if accurate, gives precisely that on Brexit.”

Markets see a prospective victory for the Conservatives as the most likely scenario for Brexit to be delivered by the Jan. 31 deadline.

Asia-focussed HSBC <HSBA.L> and blue-chip miners <.FTNMX1770> also fell, after tensions between the United States and China over the Hong Kong protests threatened to derail hopes of progress in their trade talks.

U.S. President Donald Trump approved legislation backing pro-democracy protesters in Hong Kong, drawing condemnation from Beijing and raising doubts over whether this would hamper the countries’ attempt to settle their protracted trade dispute.

Other losers on the FTSE 100 included equipment rental firm Ashtead <AHT.L> which gave up 2.6% after a downgrade by HSBC, while utilities Severn Trent <SVT.L> and National Grid <NG.L> slid nearly 2% each on ex-dividend trading.

Transport company Go-Ahead Group <GOG.L> lagged the mid-caps as it skidded 3% after mounting costs forced it to lower annual expectations for its regional bus division.

(Reporting by Shashwat Awasthi and Safia Infant in Bengaluru, additional reporting by Thyagaraju Adinarayan in London; Editing by Uttaresh.V and Shounak Dasgupta)