By Muvija M and Shashwat Awasthi
(Reuters) - UK shares slipped on Wednesday as fresh worries about global economic growth weighed on oil stocks while a stronger pound also pulled down multinational stocks, with Metro Bank losing over a third of its value after missing profit forecasts.
The FTSE 100 (FTSE) fell by 0.9 percent as sterling climbed to a 10-week high, effectively bringing down the value of the U.S. revenues of blue-chip exporters. Sterling's rise followed news that Britain's Labour Party will back an attempt by lawmakers to prevent a disorderly no-deal Brexit.
Though the more domestically exposed mid-cap index (FTMC) tends to be buoyed by a stronger pound, the index shed 0.5 percent as a string of weak trading updates dominated sentiment.
The declines put both UK indexes on course for their first weekly losses in 2019.
Oil majors BP (L:BP) and Shell (L:RDSa) tumbled as crude prices flirted with negative territory in choppy trading. [O/R]
Multinationals Reckitt Benckiser (L:RB), British American Tobacco (L:BATS) and GlaxoSmithKline (L:GSK) also fell as the pound firmed.
Concern over a prolonged Sino-U.S trade dispute rose again after the Financial Times reported that the Trump administration had rejected an offer from China for talks ahead of high-level negotiations next week. White House adviser Larry Ludlow denied the report, but the damage to sentiment was done.
Further marring the mood were soft U.S. home sales data, a bigger than expected fall in Japanese exports in December and weak factory sales in Canada - pointing to tough trading conditions across the globe.
Luxury brand Burberry (L:BRBY), meanwhile, erased early losses to add 2.9 percent despite weak Christmas sales data. Investors took comfort in what CMC Markets analyst David Madden called "a respectable performance" in mainland China.
High-end retailers across Europe have been hit by worries that the Sino-U.S. trade war could hit Chinese demand.
Uncertainties over Britain's exit from the European Union persisted. As the March 29 deadline approaches, hopes are growing that British lawmakers will prevent a no-deal departure though no sign of an agreement has yet emerged.
The EU's Brexit negotiator Michel Barnier said that a no-deal Brexit was the default scenario and opposition from the House of Commons would not prevent it from happening.
Mid-cap Metro Bank (L:MTRO) tanked nearly 40 percent, knocking more than 800 million pounds off its market value, after it announced a sharp rise in exposure to higher-risk mortgages and said profits would be hit by slowing growth.
Sanne Group (L:SNNS), which provides alternative asset and corporate administration services, tumbled more than 17 percent - its steepest intra-day fall on record - after announcing the departure of its chief executive and a trading update.
Computacenter (L:CCC), however, jumped 10.6 percent after an upbeat trading update showing higher IT spending in Germany and the United Kingdom.
Europe's biggest plastics packaging maker RPC (L:RPC) rose 4.4 percent after Apollo Global agreed to buy the company for 3.3 billion pounds.