By Atul Prakash
LONDON (Reuters) - Britain's top share index fell on Wednesday after gaining in the previous two sessions, with companies such as jet engine maker Rolls-Royce (LON:RR) and the country's biggest housebuilder Barratt slipping after their updates.
The blue-chip FTSE 100 index ended down 0.6 percent after gaining 0.6 percent on Tuesday and 0.3 percent on Monday. The benchmark index is up more than 8 percent so far this year.
Britain's mid-cap index fell by the same amount.
Rolls-Royce fell 2.1 percent. The maker of engines for military jets, ships and nuclear-powered submarines said demand for its engines for extra-wide-body civil aircraft was strong, but business aviation had weakened further.
Britain's pre-eminent engineering company, which is recovering from a string of profit warnings, also said offshore oil and gas markets showed no signs of recovering and an accounting change will cut into its profit until 2020-25.
"The new accounting policies mean that last year’s profits will be restated, and adjusted down by 900 million pounds," said George Salmon, an equity analyst at Hargreaves Lansdown (LON:HRGV).
"Operationally, the group is undergoing some major restructures. Investors will hope that it emerges as a leaner and more transparent company. However, the road ahead could be a long one."
Barratt also saw some selling pressure and fell 2.8 percent. It said it was having to cut the price of some of its most expensive London homes by up to 10 percent, the latest sign that the market is cooling after property tax increases and Britain's vote in June to leave the European Union.
Water utility Severn Trent (LON:SVT), which recommended on Wednesday the acquisition of Dee Valley Group, rose 2.2 percent after Citigroup (NYSE:C) upgraded its rating on the stock to "neutral".
Prudential rose as much as 2.5 percent to hit a 11-month high after reporting a 19 percent rise in new-business profit for the first nine months of the year, driven mainly by strong performance in Asia. The life insurer also said it planned to increase its dividend.
"Prudential (LON:PRU) has reported another good new-business performance .. with a continuation of the trends evident in H1 2016. The highlight for us was the strength of the outcome in Asia," said Eamonn Flanagan, analyst at Shore Capital.
The stock, however, pared its gains to end broadly flat.