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Bad day for insurers adds to FTSE 100's fall

Blue-chip shares remained stuck in reverse gear as a rapid turnaround in fortunes for London's top-flight showed little sign of coming to an end.

The FTSE 100 Index posted its third daily fall in a row, shedding 20.4 points to finish at 6718, more than two per cent lower than its level at the close last Friday.

Shares had rallied on the back of a Wall Street bull run which saw the Dow Jones Industrial Average top 17,000 for the first time last week. But, they have now returned to their lowest point since late April.

Investors were taking the opportunity to reflect on recent gains, particularly with the US corporate results season looming into view.

China's second quarter GDP figures are also due in coming days, meaning traders have been content to take money off the table.

The FTSE 100 was also dragged down by poorly-received updates from insurers Aviva and Admiral, which led the fallers' board.

Markets elsewhere enjoyed a more resilient session, with the Dow Jones ahead at the time of the close in London.

It followed positive results from aluminium giant Alcoa, as investors look for signs that the strengthening US economy has boosted corporate profits.

In Europe, Germany's Dax and France's Cac 40 were also ahead.

On currency markets, the pound was flat against the greenback at just above 1.71 US dollars and down slightly against the single currency at slightly below 1.26 euros.

In London, Admiral shares were down three per cent after the car insurer reported a nine per cent slide in its premium income for the first six months of this year, as it counted the cost of a downward spiral in industry pricing over the last year.

It said this meant its margins expectations were lower in 2014 than in recent years and would be "reflected in the earnings of subsequent years".

The stock slid by 52p to 1522p.

Airline stocks were back in favour after a slump in the previous session sparked by a profits warning from Air France-KLM.

British Airways owner International Airlines Group had lost seven per cent of its value, but in the latest session gained 4.1p to 340p, while easyJet topped the risers board with a lift of 39p to 1287p.

Aviva was the biggest faller in the top flight, losing nearly four per cent as chief executive Mark Wilson set out new targets on cash flow and operating expenses as part of the next stage of the company's turnaround plan.

The stock has risen sharply since the start of 2013, but after the update, it fell 18.6p to 493.9p.

The biggest risers on the FTSE 100 Index were easyJet up 39p to 1287p, Rangold Resources up 138p to 5095p, CRH up 22p to 1516p and Hammerson up 7p to 578.5p.

The biggest fallers on the FTSE 100 Index were Aviva, down 18.6p to 493.9p, Admiral down 52pto 1522p, Marks and Spencer, down 9.4p to 418p and Next, down 130p to 6365p.

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