UPDATE 2-FTSE 100 drops by most in three weeks as dour earnings, stronger pound weigh

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* Barclays slumps as annual profit halves
* Indivior, Smith+Nephew fall on gloomy outlook
* Pound gains against dollar, euro
* FTSE 100 down 1.4%, FTSE 250 drops 1.0%

(Updates to close)
By Shashank Nayar
Feb 18 (Reuters) - London's FTSE 100 fell on Thursday by the
most in nearly three weeks as a set of glum earnings reports
underscored the impact of the COVID-19 pandemic, while a
stronger pound also weighed on the export-heavy index.
The blue-chip FTSE 100 .FTSE closed 1.4% lower, led by
declines in healthcare .FTNMX4530 , energy .FTNMX0530 and
banking stocks .FTNMX8350 , while the mid-cap index .FTMC
fell 1%.
Sterling edged up against both the euro and the dollar,
reaching its highest in almost a year. GBP/
Barclays BARC.L fell 4.4% after the British lender's 2020
annual profit halved.
"The company (Barclays) got the cold shoulder from the
market as attention was drawn by large provisions on
Covid-related bad debt and a warning of a continuing impact
through the course of 2021," said Russ Mould, investment
director at AJ Bell.
Meanwhile, Bank of England policymaker Michael Saunders said
negative interest rates may soon be the best tool for the Bank
of England, and raised the prospect of unemployment taking a
long time to return to pre-pandemic levels. England's third national COVID-19 lockdown is helping reduce
infections, a study found, but the prevalence of cases remains
high as Prime Minister Boris Johnson eyes a cautious route to
re-opening the economy. The FTSE 100 has recovered nearly 35% from its March 2020
lows but has been largely range-bound since the beginning of
this year as weak corporate earnings undermine hopes of economic
growth in the second half of the year.
Smith+Nephew SN.L fell 5.9% after warning that the impact
of the pandemic is likely to continue into the first half of
2021 and posting a drop in annual trading profit. Indivior INDV.L fell 6.5% after the opioid addiction
treatment maker predicted 2021 revenue would slip on a difficult
first-half and posted an annual revenue decline of 18%.