UPDATE 3-FTSE 100 sinks to two month low on recession fears

Reuters

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    * FTSE 100 down 1.4%, FTSE 250 down 1.5%
    * Financials, oil companies biggest drags
    * UK 2-yr/10-yr gilt curve inverts for 1st time since 2008
    * Insurer Admiral up after profit beat
    * Balfour Beatty enjoyed best day in 10-1/2 yrs

 (Adds company news item, updates shares to closing prices)
    By Muvija M and Shashwat Awasthi
    Aug 14 (Reuters) - Britain's FTSE 100 tumbled to its lowest
in more than two months on Wednesday after the yields on 10-year
U.S. and UK government bonds fell below two-year equivalents for
the first time since the financial crisis, signalling mounting
fears of recession.
    The FTSE 100 index  .FTSE , already under pressure from weak
Chinese economic data, ended down 1.4%, with losses across all
but one sector. The midcap index  .FTMC  fell 1.5% to a
six-month low.
    The yield on the 10-year gilt  GB10YT=RR  fell below that on
the two-year  GB2YT=RR  shortly after 1000 GMT for the first
time since 2008, a so-called yield curve inversion traditionally
taken as a sign that markets expect a recession.  urn:newsml:reuters.com:*:nL9N22K024 
    That battered the FTSE 100, taking its fall so far this
month to 5.8%, which would be steepest monthly decline in four
years if it remains at that level for the rest of August.   
    Stocks fell elsewhere, with the mood on Wall Street equally
gloomy as the U.S. treasury yield curve also inverted. 
    
    'TEMPEST IN A TEA POT'
    Some analysts played down recession fears, saying central
banks could again ride to the rescue.
    "Quite frankly this seems a little like a tempest in a tea
pot," CMC Markets analyst Michael Hewson said. 
    Escalating China-U.S. trade tensions have been the main
worry for markets in recent months, although until August the
Brexit-induced weakness of the pound had helped the
exporter-heavy FTSE 100 notch up back-to-back monthly gains.
    "It's quite possible that we see a recession towards the
second half of next year at the earliest. I wouldn't say it's
the beginning of the end here," IG Markets analyst Chris
Beauchamp said.
    Upbeat corporate earnings helped some individual stocks. 
    Admiral  ADML.L  rose 4.1% on its best day in over two years
after the insurer posted a bigger-than-expected rise in
earnings, driven by more customers in its UK business.
 urn:newsml:reuters.com:*:nL8N25A1PK
    Balfour Beatty  BALF.L  jumped 9.3%, its biggest one-day
rise in more than 10-1/2 years, after the infrastructure company
reported a leap in profits and upgraded its annual cash
forecast.  urn:newsml:reuters.com:*:nL4N25A1X2 
    Cybersecurity firm Avast  AVST.L  climbed 8.7% after it said
revenue growth would be at the upper end of its target.
 urn:newsml:reuters.com:*:nFWN25A01G
    However, blue-chip Prudential  PRU.L  slipped 4.1% to its
lowest since January after the insurer, which has a sizeable
Asian business, said it was monitoring the protests in Hong
Kong.  urn:newsml:reuters.com:*:nL8N25A2LR
    Sports Direct  SPD.L  shed 10% after the retailer said its
auditor Grant Thornton had quit. Later in the day, the company
said it was "comfortable" with its latest accounts.  urn:newsml:reuters.com:*:nL8N25A22J
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FTSE 100 performance on Wednesday    https://tmsnrt.rs/2N3mAbl
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Muvija M and Shashwat Awasthi, additional
reporting by Yadarisa Shabong in Bengaluru; Editing by Gareth
Jones and Mark Potter)
 ((muvija.m@tr.com; within UK +44 20 7542 1810, outside UK +91
80 6749 3638))
 
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 Market digest:       .AD.L           Top 10 by vol:      .AV.L  
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