UK shares fall as Egypt fears hit Thomas Cook, Amec Foster slumps

* Amec Foster cuts dividend, shares slump

* Egypt security concerns impact Thomas Cook (Xetra: A0MR3W - news)

* Energy stocks fall on stronger dollar (Updates prices, adds quote and detail)

By Kit Rees

LONDON, Nov 5 (Reuters) - Britain's stock market retreated on Thursday as worries about security in Egypt hit travel group Thomas Cook while energy services company Amec Foster Wheeler slumped on a dividend cut.

On the benchmark FTSE 100 index, supermarket retailer WM Morrison fell 3.5 percent after reporting another drop in quarterly underlying sales. Drugmaker AstraZeneca (NYSE: AZN - news) advanced 3.1 percent after lifting its 2015 forecasts.

The FTSE 100, which had risen for the last three sessions, declined 0.4 percent to 6,387.15 points going into the middle of the trading session, although still slightly outperforming European indexes.

The FTSE 250 mid-cap index - to which Amec Foster and Thomas Cook belong - declined 0.5 percent.

Amec Foster lost around 24 percent after it cut its dividend in half, pressured by a drop in oil prices.

Thomas Cook fell 5.5 percent after Britain suspended flights to and from the Egyptian holiday resort of Sharm al-Sheikh. Authorities are investigating the possibility that a bomb planted by Islamic State militants caused last weekend's crash of a Russian airliner over the Sinai Peninsula.

Holiday company TUI Group also took a hit, with its shares down 2 percent.

"The situation in Egypt is clearly of concern for tour operators such as Thomas Cook," said Darren Sinden at Admiral Markets.

Resources companies also weighed on the index, as oil giants BP and Royal Dutch Shell (Xetra: R6C1.DE - news) retreated on a stronger dollar.

The dollar rose following Federal Reserve chief Janet Yellen's comments on Wednesday pointing to a possible interest rate hike in December. A strong dollar often makes commodities denominated in the greenback, such as oil, less affordable for holders of other currencies.

Mike van Dulken, head of research at Accendo Markets, said that questions about global growth and fears that a Fed rate hike could be too early and might hamper global growth were also pulling commodity stocks lower.

Traders added they would be looking to see if the prospect of a UK interest rate hike next year could be revived when Bank of England governor Mark Carney presents the British central bank's latest economic forecasts on Thursday.

The FTSE 100 is down by around 3 percent since the start of 2015, and some 10 percent below a record high of 7,122.74 points reached in April (LSE: 0N69.L - news) .

Sinden of Admiral Markets said that if the FTSE could break above its October highs in the 6,460-6,480 point level, then it could rally to 6,600 points by the end of December. (Additional reporting by Sudip Kar-Gupta; Editing by Mark Heinrich)