UPDATE 2-FTSE 100 lingers in red as Fed decision looms and Kingfisher wanes

* FTSE 100 down 0.1%, FTSE 250 up 0.1%
* Fed meeting conclusion eyed
* Kingfisher falls after earnings report
* IAG outshines
* Sirius Minerals steepest mid-cap faller

(Adds news items, analyst comment, updates to closing prices)
By Yadarisa Shabong and Muvija M
Sept 18 (Reuters) - London's main share index weakened on
Wednesday, underperforming its European peers ahead of a U.S.
Federal Reserve rate decision, with home improvement retailer
Kingfisher falling the most on the bourse as it struggled to
lift its earnings.
The FTSE 100 .FTSE ended 0.1% lower, while the
domestically-focussed mid-cap FTSE 250 index .FTMC added 0.1%.
The Federal Reserve is set to conclude its latest policy
meeting on Wednesday, with expectations that it will cut
interest rates for the second time this year as it looks to
cushion the economy from the impact of an ongoing trade war with
China.
"The mood today has been one of cautious optimism, as the
U.S. central bank is tipped to lower interest rates, but seeing
as the U.S. economy is in good shape, there is the possibility
the update won't be as dovish as expected," CMC Markets analyst
David Madden said.
Home improvement retailer Kingfisher KGF.L gave up 3.2%
after posting a fall in underlying earnings due to weak
performance at its French business. Some blue-chip exporter stocks such as AstraZeneca AZN.L
and British American Tobacco BATS.L cushioned losses, boosted
by a weaker pound after UK prices grew at their slowest pace
since late 2016 and mounting concerns of a no-deal Brexit also
weighed.
But losing ground were housebuilders Taylor Wimpey TW.L ,
Barratt Development BDEV.L and Persimmon PSN.L , which fell
between 1.3% and 1.8%.
British Airways owner IAG ICAG added 1.9% after BA pilots
called off a strike set for Sept. 27 to give time for talks,
after 48 hours of industrial action earlier this month grounded
almost all the airline's flights in a dispute over pay.

Luxury brand Burberry BRBY.L reversed course to close 2.5%
lower. UBS analysts hiked Burberry's price target but downgraded
the sector.
Sirius Minerals SXX.L lost another 5% on the mid-cap
index, after plunging more than 50% on Tuesday when it cancelled
a $500 million bond sale and delayed a project to mine for
fertiliser under a national park in northern England.

Royal Mail RMG.L slipped 4% after it confirmed that the
Communication Workers Union (CWU) intends to ballot its members
for industrial action against the postal company.
Small-cap Pendragon PDG.L fell 10% to a more than
seven-year low after the car dealership chain cancelled its
dividend and issued a bleak forecast as deep price cuts to
offload used car inventory pushed it to a first-half loss.