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US war of words with Russia weighs on FTSE

US war of words with Russia weighs on FTSE

The FTSE stepped back from a seven-week high as investors took fright at escalating tensions in the Ukraine which show no signs of abating.

The FTSE 100 fell 22 points, or 0.3%, to 6,681, as reports of Ukranian forces killing up to five pro-Moscow rebels were countered by Russia's announcement of army drills near the Ukranian border.

US secretary of state John Kerry also upped the diplomatic ante, warning that Russia would be committing an 'expensive mistake' if it did not ease tensions, and that the US would be forced to impose additional sanctions. 'Investors are naturally anxious about what consequences follow such a warning if it goes unheeded,' said David White, trader at Spreadex.

Even stronger-than-expected retail sales figures failed to lift spirits. The Office for National Statistics reported a 0.1% month-on-month rise for March, surpassing market expectations of a 0.4% decline.

Tullow Oil (TLW.L) dropped 20.5p, or 2.4%, to 840.5p as it abandoned its Tapender-1 exploration well off the coast of Mauritania after failing to find oil or gas.

AstraZeneca (AZN.L), reeling from shareholder revolt over pay, shed 83p, or 2%, to £40.90, bringing to an end a stunning run for the stock fuelled by bid interest from US rival Pfizer. Around 40% of shareholders rejected the pharmaceutical giant's remuneration report at its annual general meeting yesterday.

WPP (WPP.L) dropped 12p, or 0.9% to £12.62, as investors digested mixed first quarter results from the advertising agency, which showed gross margin lagging revenue growth.

Pearson (PSON.L) was the biggest riser, adding 37p, or 3.5%, to £10.87, as the educational publisher announced it had made a 'solid' start to the year. The Financial Times owner is on the 'sell' list of a number of analysts after forecasting a drop in earnings this year, and its shares have slid 20% this year. However, the market appears to have taken heart at a lack of fresh downgrades in its first quarter figures.

William Hill (WMH.L) also made strong gains, adding 9.1p, or 2.7%, to hit 342.2p, as strong performance in the betting company's online and overseas operations reported in its first quarter results offset poor results from its football business.

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