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UK-MARKETS-BRITAIN-STOCKS:Escalating Ukraine crisis drags FTSE down
Reuters The London Stock Exchange building is seen in central London September 24, 2009. REUTERS/Stephen Hird

By Francesco Canepa

LONDON (Reuters) - Britain's top share index retreated from seven-week highs on Friday as an escalation of tensions in Ukraine outweighed well-received updates from betting agency William Hill and media groups Pearson and WPP.

Ukrainian forces killed as many as five pro-Russia separatists on Thursday, Russia conducted army drills near the border, and investors cashed in on a 3-percent FTSE 100 gain over the last 10 days on rising fears it will invade.

"People are going to be quite cautious going into the weekend; we certainly are, especially with the Ukraine events unfolding quite quickly," Sanlam Securities' head of execution trading Mark Ward said. "People are generally closing positions here."

While UK blue chips only generate 0.3 percent of their sales in eastern Europe, Datastream data shows, the prospect of more sanctions and strained ties between Russia and Western powers dented appetite for shares across Europe.

U.S. President Barack Obama was expected to speak to European leaders on Friday to try to nudge the European Union towards further sanctions against Russia. U.S. Secretary of State John Kerry said on Thursday that time was running out for Moscow to change its course in Ukraine.

Britain's FTSE 100 was down 0.3 percent at 6,680.49 points at 08:48 am British Time (0748 GMT). The index, still up nearly 1 percent for the week, had hit its highest close since March 7 on Thursday.

Educational publisher Pearson bucked the trend, rising 2.2 percent to the top of the FTSE after saying it has made a "solid" start to the year.

The world's largest advertising group, WPP, also rose, up 0.4 percent, after it reported much better-than-expected revenue growth and said it had seen a surge in new client wins due to changes in the industry.

William Hill surged 1.4 percent after its first-quarter results, with analysts highlighting positive numbers in its overseas and online markets despite weak results at its football business and regulatory headwinds in Britain.

"We believe that William Hill is a market-leader which has seen a trough in trading in 1Q14 and will soon pass a peak of concern over regulatory risks," Numis analysts said in a note.

(Editing by Louise Ireland)