By Alistair Smout
EDINBURGH (Reuters) - Britain's top equity index fell on Wednesday, hit by disappointing corporate updates and by a decline in bank shares after regulators imposed fines to settle allegations of foreign exchange malpractice.
Outsourcing company Capita slid 6.4 percent, the top FTSE 100 faller, with traders citing concerns about a possible slowdown in its order pipeline, even though Capita said it was on track for at least 8 percent organic growth for the full year.
Retailer J Sainsbury fell 3 percent after it threw down the gauntlet to larger rival Tesco, taking a hit on profits and the dividend to fund lower prices in a latest escalation of the British supermarket battle.
"Slashing stores and reducing costs may not be enough to warrant growth for Sainsbury's, as the likes of Aldi confirmed details of an aggressive expansion plan, looking to double UK store numbers by 2022. The supermarket war continues," Avin Nirula, trader at Accendo Markets, said.
The blue-chip FTSE 100 index, which had risen for the last five sessions in a row, declined by 0.3 percent to 6,610.12 points by 1501 GMT.
The index held above its September low of 6,600, but remains 4.3 percent off its highs for the year, posted in the same month.
A 0.5 percent fall in HSBC and a 2 percent decline in Barclays combined to take the most points off the FTSE 100.
Global regulators imposed penalties totalling $3.4 billion on five major banks, including UBS, HSBC and Citigroup on Wednesday, in a landmark settlement over allegations of price fixing in the foreign exchange market.
A year-long probe has put the largely unregulated $5 trillion-a-day market on a tighter leash, with dozens of dealers suspended or fired.
Barclays, a major foreign exchange market player, had been expected to be part of the settlement but the FCA regulatory body said its probe into the British bank was continuing.
"The fact that Barclays is not part of (the settlement) is a negative surprise, which is why the shares are being impacted," said Securequity sales trader Jawaid Afsar.
(Additional reporting by Sudip Kar-Gupta; Editing by Susan Fenton)