* FTSE 100 down 0.7%, FTSE 250 down 0.1%
* Blue-chip index underperforms European peers
* Rolls-Royce slump after raising cost estimates
* Rotork , Meggitt rise after results
* Sirius Minerals tanks after suspending bond sale
(Adds company news items, updates shares)
By Shashwat Awasthi and Muvija M
Aug 6 (Reuters) - London's FTSE 100 closed sharply lower on
Tuesday, its sixth straight session in the red, bringing its
losses to more than 5% since U.S. President Donald Trump
announced more tariffs on Chinese exports, while poor results
sent Rolls-Royce tumbling.
The FTSE 100 .FTSE , which suffered its worst day this year
in the last session, lost 0.7% to end the session below its
200-day moving average - seen as a technical support level - for
the first time since late May.
A handful of strong corporate earnings from industrial firms
capped losses on the mid-cap FTSE 250 .FTMC . The index closed
0.1% lower.
Engine maker Rolls-Royce RR.L slumped 7%, its biggest
one-day fall since 2015, after it raised cost estimates to
tackle problems relating to its Trent 1000 engines, which have
caused airlines to ground Boeing 787s while repairs are carried
out. Further weighing on the main index were oil majors BP BP.L
and Shell RDSa.L , as well as internationally-exposed stocks on
the back of a slight recovery in the pound.
Washington on Monday formally tagged China a currency
manipulator for the first time since 1994, responding to Beijing
allowing the yuan CNY= to weaken past 7 per dollar for the
first time in a decade and signalling a deepening of the
conflict between the countries, the world's two biggest
economies.
"We've had such heavy selling I wouldn't be surprised to see
some bump-ups as bulls test the water for a dip," Markets.com
analyst Neil Wilson said.
MORE PAIN AHEAD
Until last week's renewed escalation of the trade tensions,
the FTSE 100 had recovered from a slump in May to post
back-to-back monthly gains, helped by a fall in the pound that
benefits many of its internationally-focussed constituents.
The latest trade friction has erased all of the index's July
gains and has placed the index on course for its steepest
monthly fall in four years.
"We should expect things to get worse before they get
better. There is likely a bit more pain ahead, but I feel the
market will eventually turn around," Wilson said.
On the FTSE 250, industrial group Rotork ROR.L jumped 8%
after half-year results that Jefferies called "very robust",
while engineering firm Meggitt MGGT.L advanced 3% after it
raised its annual organic revenue growth forecast.
Fashion retailer Boohoo BOOH.L added 4.1% after sealing a
deal to buy the online businesses of fashion chains Karen Millen
and Coast.
Fertilizer maker Sirius Minerals SXX.L , however, slumped
nearly 29% to a more than four-year low after it suspended a
planned $500 million bond sale central to the funding of its
Polyhalite mining project in the north-east of England.
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