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Ex-div trading, miners weaken FTSE 100; Saga takes down midcaps

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

By Muvija M and Yadarisa Shabong

(Reuters) - A five-day rally for Britain's main share index ended on Thursday when financial heavyweights slid on ex-dividend trading and miners weakened, while a profit alert sank tourism and insurance group Saga on the midcap index.

The FTSE 100 dipped 0.2 percent, well off a six-month high it held in the last two sessions, while the midcaps lost 0.3 percent.

On the Brexit front, a debate is ongoing at the House Of Lords after a law was narrowly passed in the lower house of parliament to seek a second delay to the exit date to prevent a potentially disorderly no-deal departure on April 12.

However, the pound, which initially cheered on the news, took a turn for the worse as concerns mounted that the UK may be headed for a long delay, which could lead to more uncertainty.

Highlighting the brunt of the Brexit-related hit to financial markets, Britain has lost 6.6 billion pounds in economic activity every quarter since it voted to leave the EU, according to S&P Global Ratings.

The main index was weighed down by steep losses in financials Lloyds, Direct Line and St James's Place, which traded ex-dividend.

Software company Micro Focus fell 6 percent to its worst day in 10 months after a Citigroup downgrade, while miners dropped 1.2 percent as copper prices fell on demand concerns following weak German factory data.

Europe's largest economy showed industrial orders falling at their steepest rate in more than two years in February, hit by a slump in foreign demand.

CMC Markets' analyst David Madden said it seemed like investors were booking profits as the markets have seen a strong week so far on easing fears over a no-deal Brexit and growing hopes of a resolution to the Sino-U.S. trade dispute.

"It's not really a surprise that the market has pulled back ever so slightly today."

Nearly half of the FTSE 250's fall on the day was contributed by Saga, the over-50s tourism and insurance specialist which tanked after it warned on profit and slashed its dividend amid a highly competitive motor and home insurance market.

"(This is a) kitchen sink job, it looks nasty," one trader said of Saga, whose shares were last down 37 percent at their lowest ever.

Entertainment One, maker of children's TV show Peppa Pig, outperformed with a 3.5 percent gain after reporting higher underlying core profit at its music division.

But small-cap online electricals retailer AO World slid 6 percent after forecasting adjusted core earnings for the year at the lower end of market view.

Baby products seller Mothercare slumped 7 percent after it flagged challenging market conditions and reported a fall in UK like-for-like sales.

(Graphic: Tourism and insurance group Saga lags midcaps, https://tmsnrt.rs/2HYOUKa)

(Reporting by Yadarisa Shabong and Muvija M in Bengaluru; Editing by David Holmes and Hugh Lawson)