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UK Stocks Kick Off Week Lower, Entain Drops to 3-Year Low

  • Aviva drops on purchase of AIG's UK protection business unit
  • Entain sinks on online gaming revenue warning
  • AstraZeneca gains as Jefferies upgrades to buy
  • FTSE 100 down 0.8%, FTSE 250 off 1.0%

Sept 25 (Reuters) - UK stocks fell on Monday, in a grim start to the last week of the quarter, while Ladbrokes owner Entain tumbled to a three-year low after warning of a decline in online gaming sales.

The exporter-heavy FTSE 100 fell 0.8% to its lowest level in over a week, while the mid-cap FTSE 250 slid 1.0%.

Entain dropped 13.1% after saying it expects online net gaming revenue for the third quarter and full year to decline amid ongoing regulatory issues in Britain and slower growth in Australia and Italy.

The travel and leisure index that houses the gambling firm dropped 3.5%.

With a week left until the third quarter ends, both the FTSE indexes are headed for gains as investors take comfort from signs of cooling inflation that prompted the Bank of England to steer clear of an interest rate hike last week.

"It's generally accepted that they're (BoE) not out of the woods yet, but it was a positive sign from a market's point of view to see an end to that consecutive raising of interest rates, said Christopher Peters, trading floor manager at Accendo Markets.

Also pressuring stocks, British 30-year government bond prices were headed for their biggest one-day price fall since Aug. 11, tracking US Treasuries and German Bunds.

Meanwhile, the pound fell to its lowest since March, dropping 0.26%.

Food and beverage lost 2.5%, among the top sectoral drags, with Imperial Brands and British American Tobacco leading declines, down 5.7% and 3.2%, respectively.

Michael Hewson, chief market analyst at CMC Markets UK, noted that the losses in tobacco firms were tracking weekend reports that the UK government was considering stricter restrictions on cigarette sales.

Among other stocks, AstraZeneca added 1.3% to hit a near one-month high after a Jefferies upgrade.

Aviva lost 1.0% after the life insurer said it agreed to acquire the UK protection business of AIG for 460 million pounds ($563 million).

The life insurance sector housing the firm was off 2.0%.

Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Sohini Goswami, Dhanya Ann Thoppil and Richard Chang

Source: Reuters

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