Britain's FTSE hesitates after mixed earnings reports

MILAN: Britain's blue chip share index was steady on Tuesday following mixed earning reports and caution in world equity markets ahead of U.S. midterm elections.

Disappointing results from the country's fourth largest supermarket group Morrisons and bookmaker William Hill weighed, although battered tobacco firm Imperial Brands provided support after a reassuring update.

The FTSE 100 top share index was down 0.1 percent by 0929 GMT, also weighed down by a stronger pound, which makes UK exports less competitive. The domestically focused FTSE 250  index was up 0.2 percent.

"With Tuesday's main event - the U.S. midterm elections - arguably not yielding any tradable news until the early hours of Wednesday, Europe got off to a predictably slow start," said Spreadex analyst Connor Campbell.

"That the pound has continued to strengthen likely contributed to the FTSE's dip," he added.

Sterling rose as hopes grew for a Brexit deal breakthrough after a report said the European Union is preparing to back a compromise proposal on the Irish border to resolve the last major hurdle in the talks.

Morrisons was the biggest faller on the FTSE 100 in morning trade, down 4 percent, following its disappointing update.

The group said third-quarter growth had slowed from the previous quarter and came in below analysts' forecasts.

"After a party there is usually a hangover and that's what supermarket Morrisons faces this morning as it reports slowing growth... slightly short of analysts' expectations," said Russ Mould, investment director at AJ Bell.

"This follows on from a great summer when the World Cup and UK heatwave helped the company achieve its best sales performance in nearly a decade," he added.

Shares in rivals Tesco, which also missed first-half profit forecasts when it reported results last month, and Sainsbury's fell 1 and 0.3 percent respectively.

William Hill dropped 4.7 percent after it forecast lower full-year operating profit, largely below analysts' consensus, blaming weaker football and racing margins as well as challenging conditions on the UK high street.

Shares in motor insurer Direct Line dipped 0.4 percent after it reported a drop in quarterly gross written premiums, hit by fierce competition.

In contrast, Imperial Brands gained 0.8 percent after the tobacco firm reported higher full-year revenue and better-than-expected adjusted profit, helped by market share gains.

"Today's beat should reassure investors," said Liberum analysts in a note, reiterating their buy rating on the stock.

Also rising were shares in AB Foods, up 1.7 percent, after the company reported an adjusted operating profit of 1.4 billion pounds, up 3 percent and ahead of analyst expectations.

AB Foods however said price pressures in the global sugar market would prevent its earnings from growing in the coming 12 months as the drag on the business offsets strong demand for its fashion retailer Primark.

The reporting season in the UK has reached its midpoint and according to UBS, earning beats have outnumbered misses so far.