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* FTSE 100 little changed, midcaps gain
* Airlines under pressure after Ryanair warning
* Housebuilders drop on plans to tax foreign buyers
By Danilo Masoni
MILAN, Oct 1 (Reuters) - The UK's top share index lagged other European markets on Monday as investors kept an eye on developments over Brexit from the ruling Conservative Party's annual conference.
Comments from finance minister Philip Hammond lifted the pound, weighing on shares in export-oriented firms, although gains among oil majors on rising crude prices provided support.
"All eyes on sterling over the next few days as the pound will remain sensitive to news from the Conservative conference," said Peel Hunt economist Ian Williams.
Hammond said the UK had the fiscal capacity to cope with leaving the European Union without any agreement but believed the mood in Brussels was to reach a divorce deal. comments lifted the pound and that in turn sent shares in big multinationals BAT BATS.L , Compass Group CPG.L and Shire SHP.L down between 0.5 and 1.2 percent.
Airlines, which have recently been hit by rising oil prices which could increase their fuel costs, were under further pressure after a profit warning from Ryanair RYA.I .
Europe's largest low-cost carrier cut its forecast for full-year profit by 12 percent and said there could be worse to come if recent coordinated strikes across Europe continue to hit traffic and bookings. London-listed shares fell 8.4 percent, wile FTSE-listed rivals easyJet EZJ.L and British Airways owner International Airlines Group ICAG.L fell 4.3 and 1.6 percent respectively.
Housebuilders were another weak spot.
Berkeley Group BKGH.L , Barratt Developments BDEV.L and Persimmon PSN.L were among the top fallers on the FTSE, all down over 1 percent on plans by the Conservative Party to levy an extra fee on foreign buyers of homes in Britain. UK PM has plans to impose higher taxes on foreign buyers of UK properties, roughly half of all residential transactions in Central London, which could weigh on FTSE housebuilders," said at Accendo Markets analyst Mike van Dulken.
Among the smaller companies, Avocet Mining AVM.L dropped 17 percent after warning that it could be broken up as the gold miner continues talks with its largest shareholder to restructure its debt. Group JUSTJ.L fell 9 percent after the British pensions provider said its finance chief would step down at the end of the month, days after proposed regulatory changes forced the company to delay dividend payments.
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