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Europe: Britain's FTSE steadies near 3-week highs; Boohoo jumps

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[LONDON] Britain's top stock index held near a three-week high on Wednesday as investors took profits from a recent rally in oil majors after crude prices hit a four-year peak, while retailer Boohoo jumped after a strong set of earnings.

The FTSE 100 ended 0.1 per cent up, as European markets edged higher ahead of a widely expected rate hike from the US Federal Reserve later on Wednesday.

Boohoo shares jumped 11 per cent after the fashion retailer raised its full-year sales forecast and first half profit increased 22 per cent.

Miners Randgold Resources and Fresnillo were among the leading FTSE losers, both down 2.5 and 3.6 per cent respectively, while oil majors Shell and BP also lost ground.

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Mid-cap Indivior declined 16 per cent after the drugmaker revised its full-year earnings guidance as it sharply lowered its revenue expectation for opioid addiction drug Sublocade.

AA fell 13 per cent after the roadside recovery and insurance group said extreme weather had raised its costs and hit first-half core profit.

Concerns about the progress of Brexit negotiations dogged sentiment with British carmakers triggering some contingency plans by certifying models in Europe.

British stocks, however, remained supported among value-hunters because of their relatively cheap valuations compared to other major equity markets.

At around 4 per cent, Britain offers a higher dividend yield than markets such as Europe and the United States.

On a valuation basis, the 12-month forward price-earnings multiple is 13 per cent below global equities while the price-to-book ratio for the index is about a fifth below its long term average, according to Thomson Reuters data.

"These valuations chime with positioning data that show the UK to be somewhat of a consensus underweight," said Mark Richards, a global multi-asset strategist at JP Morgan Asset Management in London.

As few as 630 UK-based finance jobs have been shifted or created overseas with just six months to go before Brexit, a far lower total than banks said could move after Britain's surprise 2016 vote to leave the European Union, according to a Reuters survey.

REUTERS