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FTSE dips as lira crisis continues, esure surges

A red London bus passes the Stock Exchange in London, Britain, February 9, 2011. REUTERS/Luke MacGregor/File Photo

By Julien Ponthus

LONDON (Reuters) - British shares dipped on Monday as the Turkish currency crisis continued to rattle global markets while a possible 1.17 billion pound bid for esure sent shares in the insurance company surging over 30 percent.

The FTSE 100 (.FTSE) closed down 0.3 percent broadly in line with its European peers.

"The (lira) currency's travails and the timid response by the authorities has cast a dark cloud over European equities this morning, with the downbeat mood from Friday still pervading", said Neil Wilson, a market analyst at Markets.com.

European travel stocks were hard hit with TUI (TUIGn.DE) posting the worst performance of the British blue chip index, with a 2.5 percent fall.

Amid midcaps, fund management group Ashmore (ASHM.L) fell 5.4 percent.

"Ashmore is widely seen as the London-listed bellwether for emerging markets and its shares are unsurprisingly being sold off in the wake of the crisis in Turkey", said Russ Mould at AJ Bell.

Other financial stocks also suffered.

South African financials Investec (INVP.L) and Old Mutual (OML.L) both fell 2.4 percent as Turkey worries took the rand down to a new two-year low. (ZAR=)

The star performer of the mid-sized listed firms segment was Britain's esure (ESUR.L) which said it was in advanced talks over a possible 1.17 billion pound bid from Bain Capital Private Equity, sending its shares more than 30 percent higher.

Shares of British shipping services provider Clarkson (CKN.L) jumped 6.6 percent after publishing its first-half results.

Among smaller companies, DP Eurasia (DPEU.), operator of the Dominos Pizza franchise in Turkey, fell 15 percent.

Chemring Group (CHG.L) also suffered a steep fall, down 12.3 percent after an explosion at a military hardware factory near Salisbury left one person dead on Friday.

(Additional reporting by Sudip Kar-Gupta in Paris; Editing by Toby Chopra)