UPDATE 3-FTSE 100 dips as sterling firms on report of potential Brexit delay


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    * FTSE 100 reverses to close 0.4 pct down
    * FTSE 250 up 0.6 pct
    * Housebuilders extend gains after Brexit report and BAML
    * Airline Flybe slides after 1p-per-share buyout offer
    * Retailer Quiz tanks after revenue warning

 (Adds analyst comments, closing prices)
    By Muvija M
    Jan 11 (Reuters) - British blue-chip shares retreated on
Friday, singed by a sterling rally on a newspaper report of
cabinet ministers saying that Britain would have to delay its
European Union exit.
    The report in the Evening Standard pushed sterling up
against the dollar and euro, dragging the exporter-heavy FTSE
100  .FTSE  off earlier highs and down 0.4 percent. But the
currency fell back after a spokeswoman for British Prime
Minister Theresa May ruled out any delay.
    Companies that earn mainly U.S. dollars are hit by a
stronger pound and were the among the biggest drags on the
index. AstraZeneca  AZN.L  fell 3.6 percent, while HSBC  HSBA.L 
and GlaxoSmithKline  GSK.L  also fell. 
    But weakness in oil majors BP  BP.L  and Shell  RDSa.L  on
lower crude prices made the sector the biggest drag on the FTSE
    The Evening Standard cited unnamed cabinet ministers as
saying Brexit looks increasingly likely to be delayed beyond
March 29 because of the backlog of legislation that needs to be
passed.  urn:newsml:reuters.com:*:nFWN1ZB095
    Stocks had been boosted earlier by reassurance from U.S.
Federal Reserve Chairman Jerome Powell on the pace of further
increases to interest rates, with progress in U.S.-China trade
talks also providing support.  urn:newsml:reuters.com:*:nW1N1XO023
    Mid-caps, which make half of their income at home, rose 0.6
percent to their highest in more than a month.
    David Madden, CMC Markets analyst, said any Brexit delay
might provide a short-term bounce for the pound but emphasised
that the outlook remains highly uncertain.
    "All the various options, be it Theresa May’s plan, a second
referendum, or leaving the EU without a deal – they all seem to
be almost equally unpopular,” he said. 
    British homebuilders  .FTNMX3720  sensitive to Brexit news,
extended early gains to trade up 2.1 percent as the sector index
 .FTNMX3720  registered its biggest weekly gain in nearly three
years, helped by Bank of America Merrill Lynch upgrading the UK
housebuilding sector to neutral.
    Taylor Wimpey  TW.L  jumped 4.8 percent to top the FTSE 100
leader board, with Persimmon  PSN.L  and Barratt Developments
 BDEV.L  up 4.4 and 2.9 percent respectively.
    Adding to worries at home, however, official data showed
that Britain's economic growth hit a six-month low in the three
months to November as factories suffered from tough global trade
conditions ahead of Brexit.  urn:newsml:reuters.com:*:nL9N1SF00Q
    Airline Flybe  FLYB.L  plummeted 77.1 percent to a record
low of 3.8 pence after a heavily discounted 1 pence-per-share
buyout offer from a consortium of Virgin Atlantic, Stobart
 STOB.L  and Cyrus.  urn:newsml:reuters.com:*:nL3N1ZB2DO 
    Stobart jumped 7.2 percent after the news to top the mid-cap
    Retailers continued to upset the markets, with AIM-listed
fast-fashion retailer Quiz  QUIZ.L  tanking 32.5 percent to a
record low after a revenue warning following disappointing
Christmas sales.  urn:newsml:reuters.com:*:nRSK8138Ma 
    Suits specialist Moss Bros  MOSB.L  also said the period
ahead would be "extremely challenging", but its shares firmed as
analysts took comfort from strong e-commerce sales.  urn:newsml:reuters.com:*:nL3N1ZB2IP
    Debenhams  DEB.L  plunged 18.8 percent in high-volume
trading. Investors had forced the department store group's CEO
off the board and the chairman out of the company on Thursday
after another plunge in sales.  urn:newsml:reuters.com:*:nL8N1ZA18J
    UDG Healthcare  UDG.L  slumped 7.7 percent to be the biggest
mid-cap faller after Jefferies downgraded the stock and said the
healthcare services provider's preliminary expectation for the
year "does not sound attractive".  urn:newsml:reuters.com:*:nL3N1ZB2TM

 (Reporting by Muvija M
Additional reporting by Pushkala Aripaka in Bengaluru
Editing by Raissa Kasolowsky and David Goodman)
 ((Muvija.M@thomsonreuters.com; within U.S. +1 646 223 8780,
outside U.S. +91 80 6749 3638; Reuters Messaging:
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