London stocks fall, but set to end holiday-shortened week with gains

April 17 (Reuters) - Britain's benchmark index fell on Thursday, but was on track for a strong weekly gain on the last day of a holiday-truncated week primarily due to potential tariff exemptions by U.S. President Donald Trump.

The FTSE 100 index .FTSE was down 0.7% and the mid-cap FTSE 250 index .FTMC lost 0.4%, as of 10:40 GMT on Thursday; for the week, they were up 3.1% and 3.6%, respectively.

Investors were set for a long weekend, with UK markets closed on the following day for Good Friday and on Monday for Easter.

Leading the losses on Thursday, the automobiles and parts index .FTNMX401010 dropped 3.2%.

Defence stocks Rolls Royce RR.L and BAE Systems BAES.L slipped 2.8% and 2.6%, respectively, weighing significantly on the benchmark index.

Precious metals and mining index .FTNMX551030 slipped 1% after eight straight sessions of gains. For the week, the sub-index outperformed its peers, climbing 7.6%, benefiting from higher gold prices on safe-haven demand.

British stocks gained momentum earlier this week after the U.S. indicated potential exemptions on auto-related levies on Mexico, Canada and other places.

Elsewhere, the European Central Bank's interest rate decision at 1215 GMT is on the radar. Traders see a quarter-point cut by the central bank to cushion the struggling European Union economy against U.S. tariffs.

Among individual stocks, Sainsbury's SBRY.L ticked up 2.6% after Britain's second-largest food retailer forecast flat profit this year as it pledged to sustain its competitive edge if a price war emerges.

Man Group EMG.L fell 3% after the hedge fund said its assets under management fell by about $5.6 billion in the two weeks to April 14.

British meal delivery company Deliveroo ROO.L rose 3.7% after its orders in the first quarter jumped 7%, beating the 6% recorded in the final quarter of 2024.

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