FTSE 100 slides as European mood sours, earnings boost mid caps

A British pound coin is seen in front of the stock market chart displayed in this illustration taken November 9, 2021. REUTERS/Dado Ruvic/Illustration

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  • Dechra Pharmaceuticals slips on cut price placement
  • Frasers jumps on optimistic earnings forecast
  • FTSE 100 down 0.6%, FTSE 250 up 0.2%

July 21 (Reuters) – Britain’s FTSE 100 plunged on Thursday as the deepening political crisis in Italy and an impending policy decision by the European Central Bank weighed on the mood of investors across Europe, while Positive corporate earnings reports supported the mid cap index.

The blue-chip FTSE 100 (.FTSE) fell 0.6%, largely in line with losses in the broader European equity benchmark (.STOXX).

Concerns about an energy supply crisis in Europe eased as gas began to flow again along the largest pipeline from Russia to Germany, although an expected rise in interest rates in Europe and the resignation of Italian Prime Minister Mario Draghi weighed.

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Despite a severe cost of living crisis in the UK, the FTSE 100 has outperformed its global peers this year due to its high exposure to commodities and defensive sectors.

However, growing concerns about a global recession cast doubt on whether the index could continue to shine in the second half of the year.

“Peaking inflation momentum and rising global recession risks will likely lead to a return to quality and, to some extent, growth stocks,” said Mathieu Rachet, head of strategy research. shares in Julius Baer.

“We therefore see more downside risk to UK equities relative to their US and European counterparts from current levels should a recession materialize.”

Meanwhile, former finance minister Rishi Sunak and foreign secretary Liz Truss will battle to become Britain’s next prime minister after winning lawmakers’ final vote. The result will be announced on September 5. read more

Among individual stocks, veterinary drug maker Dechra Pharmaceuticals (DPH.L) slipped 5.1% to the bottom of the FTSE 100 after a cut price placement, while Carnival Corp (CCL.L) fell 8, 8% on stock offering plans.

The national mid-cap index (.FTMC) gained 0.2%, with Frasers Group (FRAS.L) jumping 24.1% to the top of the index after the sportswear and fashion group of Mike Ashley said he expected higher profits next year. Read more

Online trading platform IG Group (IGG.L) climbed 5.1% after reporting a slightly better-than-expected annual profit. Read more

However, pub operators Mitchells & Butlers (MAB.L) and Fuller, Smith & Turner (FSTA.L) fell 5.6% and 1.6%, respectively, after warning about costs as the sector strives to protect its margins and attract customers. Read more

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Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu

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