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FTSE 100 retreats after Fed plays down rate cut hopes


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UPDATE 1-FTSE 100 retreats after Fed plays down rate cut hopes


* FTSE 100, FTSE 250 down 0.1%

* Markets subdued as Fed tempers rate cut hopes

* Oil majors offset broad falls

* Bonmarche tanks after accepting discounted offer (Adds news items, analyst comment, updates share prices)

June 26 (Reuters) - London's main index dipped slightly onWednesday as broad losses in equities after the U.S. FederalReserve tapered expectations of interest rate cuts werecushioned by solid gains in heavyweight oil stocks, fueled byhigher crude prices.

The FTSE 100 .FTSE and the mid-cap FTSE 250 .FTMC bothtipped 0.1% lower by 0748 GMT.

Losses on the main index were spread across the board, but ahandful of companies were in the black. Oil majors helped theindex outperform its European peers as a decline in U.S. crudestockpiles and U.S.-Iran worries supported prices. O/R

After raising hopes of fresh stimulus last week, the Fed onTuesday tempered its tone of monetary easing at its nextmeeting, lifting the dollar from a three-month low, butdisappointing investors who have been betting on a more relaxedpolicy.

Fed Chairman Jerome Powell reined in expectations ofaggressive rate cuts, while his St Louis colleague James Bullardsaid he does not think the U.S. economic situation warrantseasing rates. urn:newsml:reuters.com:*:nL2N23W1HA

"Some have suggested that Powell's comments left the marketsnone the wiser as to whether the Fed will embark on a new easingcycle next month, but surely that's entirely the point," CMCMarkets analyst Michael Hewson said.

The greenback's strength weighed on gold prices, pushingprecious metals miner Fresnillo FRES.L down 2.6% to the bottomof the blue-chip index.

Bets that the Fed would ease policy have put the FTSE 100 oncourse for its best month since January, counteracting effectsof U.S. sanctions on Iran and uncertainty ahead of PresidentDonald Trump's meeting with Xi Jinping.

"The market has baked in rate cuts that the Fed is yet tosee as completely necessary," Markets.com analyst Neil Wilsonsaid.

Internationally exposed stocks were unable to cash in,however, as broader sentiment remained downbeat.

On the mid-cap index, engineering and oilfield servicesprovider Wood GroupWG.L climbed 6.4% on track for its bestday in seven months after it forecast higher half-year operatingprofit. urn:newsml:reuters.com:*:nL4N23X1Y6

Among small-cap stocks, professional services company RPS RPS.L plummeted 35% to a more than 10-1/2 year low afterwarning of "materially" lower annual results. urn:newsml:reuters.com:*:nL4N23X1S5

Women's fashion retailer BonmarcheBONB.L tanked 26% afterit backed a 11.445 pence per share buyout offer from businessmanPhilip Day's firm Spectre Holdings, which was at a 28% discountto the stock's close on Tuesday. urn:newsml:reuters.com:*:nRSZ4132Da (Reporting by Shashwat Awasthi in Bengaluru; Editing by BernardOrr) ((Shashwat.Awasthi@thomsonreuters.com; within U.S.+1 646 2233403; outside U.S. +91 80 6749 3403; Reuters Messaging:shashwat.awasthi.thomsonreuters.com@reuters.net))

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