- FTSE 100 down 0.6%, FTSE 250 down 0.9%
March 7 (Reuters) - UK shares dropped on Friday, with both the blue-chip and midcap indexes set for weekly declines, as growing uncertainty around U.S. trade policy kept investors cautious on equities.
The blue-chip FTSE 100 dropped 0.6% at 1040 GMT, with the index's export-oriented companies pressured by gains in the pound . The domestically focussed FTSE 250 fell 0.9%.
The FTSE 100 was on track to decline 2% for the week, its worst since December, while the midcap index was set to drop for a third straight week.
U.S. President Donald Trump on Thursday suspended tariffs on Canada and Mexico, which he had imposed earlier in the week, but the move failed to cheer investors.
Burberry tumbled 6.3%, dragging the personal goods sector down 5.1%, as worries about the economic impact of tariffs weighed on Europe's luxury stocks.
Meanwhile, a bond selloff sparked by Germany's plan for a massive shift to higher spending eased on the day, but the UK's 10-year government bond yield was still trading at its highest in over one month.
Most sectors were in the red, but the oil and gas sector gained 0.3% as crude prices rose on the day.
Among other individual movers, insurer Just Group slumped 14.6% after missing estimates for pre-tax profit and tangible net asset value.
Schroders fell 5%, reversing some of Thursday's 12.6% gains, as the British money manager unveiled plans for cost reductions.
Though 0.4% lower on the day, the aerospace and defence sector was set for weekly gains of over 9%, on expectations for higher European defence spending.
House prices in Britain unexpectedly fell 0.1% in February, data from mortgage lender Halifax showed.
Investors awaited a key U.S. jobs report and a speech from Federal Reserve Chair Jerome Powell for more insights into the economic and monetary policy outlook of the world's biggest economy.
Reporting by Lisa Pauline Mattackal; Editing by Vijay Kishore
Source: Reuters