By Alistair Smout
LONDON (Reuters) - Britain's top share index steadied on Tuesday after a steep drop in the previous session, although broker downgrades on Associated British Foods (LON:ABF) and Intu Properties kept shares under pressure.
The FTSE 100 was down 0.2 percent at 6,685.90 by 0833 GMT, underperforming flat continental European indexes.
It stabilised after a more than 1 percent fall on Monday. Global equities were buoyed after U.S. Federal Reserve official Lael Brainard gave a dovish speech after the European markets closed on Monday, quelling concern that the Fed might raise interest rates as soon as next week.
Associated British Foods fell 2.4 percent, a top faller on the index, taking falls this week to over 12.5 percent.
The stock fell steeply on Monday after results, hit by lacklustre trading at its flagship Primark chain. On Tuesday, it suffered a spate of broker downgrades.
"With a third successive year of Primark margin falls now expected for 16/17, we ... see double-digit downside to the stock," said analysts at Jefferies in a note. The broker downgraded AB Foods to "underperform", and is one of the most accurate analysts on the stock.
Intu Properties dropped 1.9 percent after being cut to "sell" from "hold" by Deutsche Bank (DE:DBKGn).
Oil and gas stocks came under pressure, down 1.1 percent as crude prices fell back.
There were more dramatic moves in the mid-cap FTSE 250. Ocado (LON:OCDO) slumped 12.7 percent after the online grocer warned of sustained margin pressure due to an intensely competitive market.
Russ Mould, investment director at AJ Bell, said that while its volume performance was its best in over five years, "the group is not immune to the supermarket price war and is seeing sustained and continuing pressure on its margins."
Among risers, sports retailer JD Sports rose as much as 10 percent to a record high after a jump in first half revenue and profit.