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UPDATE 2-Oil majors, poor earnings hammer FTSE 100

By Shashwat Awasthi and Muvija M

* FTSE 100 down 0.6%, FTSE 250 down 0.2%

* Oil firms drag on main index

* Chemicals co Johnson Matthey slumps 5.4%

* Builder Galliford up on positive forecast (Adds company news items, updates shares)

By Shashwat Awasthi and Muvija M

July 17 (Reuters) - The FTSE 100 index tumbled on Wednesday amid sharp falls in oil majors as investors priced in an overnight slide in crude to one-week lows, while downbeat trading updates knocked chemicals group Johnson Matthey and miner Fresnillo.

Shell and BP slipped 1.5% and 2.9% respectively, and were the biggest drags on the blue-chip index, pulling the FTSE 100 0.6% lower even as global oil prices recovered some ground. The midcaps dipped 0.2%.

Johnson Matthey skidded 5.4% - its biggest one-day fall in nearly four years - to the bottom of the main index after it said profit at its Clean Air business, which provides the lion's share of its earnings, would fall this year.

Fresnillo also slid 2.8% after it cut its annual production targets, citing lower-than-expected ore grades and construction delays at a gold mine in Mexico.

Investor appetite for riskier assets was also put off by U.S. President Donald Trump's comments that the United States still had a long way to go to close a trade deal with China.

"Some of the hesitation seen in U.S. markets (from U.S.-China trade tensions) will spill over to the UK as well, with concerns that economic weakness is beginning to deepen even as central banks look to respond with easing," IG Markets analyst Chris Beauchamp said.

The falls across oil stocks, banks and miners more than offset gains for exporters like Imperial Brands and Diageo, which benefited from the pound's slide to a two-year low against the dollar, the product of both Brexit concerns around the Conservative leadership election and a run of U.S. data which has bolstered the greenback.

Though sterling recovered slightly later on, exporters still managed to hold on to the day's gains.

Seeking to woo voters on the right, both Boris Johnson and Jeremy Hunt have indicated they could take Britain out of the European Union without a deal at the end of October, potentially sparking chaos at British ports and hammering growth.

"It is increasingly looking like there is going to be something far scarier than ghouls and ghosts on Halloween 2019: a no-deal Brexit," Spreadex analyst Connor Campbell said.

Brexit jitters have taken a heavy toll on the housing and construction market, with mid-cap builders Galliford among those first in the firing line.

Its shares added 3.1%, among top risers on the mid-cap index on Wednesday, after it forecast annual pretax profit in line with analysts' estimates, a sign it was managing to ride out the worst of a downturn in housing sales and prices.

Luxury brand Burberry rose another 3% and scaled a record high following a slew of rating upgrades, a day after posting its biggest one-day gain on the back of robust first-quarter sales.

Among smallcaps, Saga surged 14% after activist investor Elliott revealed a stake in the tourism and insurance firm, less than a month after it flagged concerns around its tours business. (Reporting by Shashwat Awasthi and Muvija M in Bengaluru, Editing by William Maclean)