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London's FTSE 100 tumbles on global slowdown worries

05/19/2022 | 04:44am EDT
FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

* Consumer companies lead slide

* Royal Mail tumbles to December 2020 lows

* Homeserve jumps after Brookfield's buyout offer

* FTSE 100 down 1.8%, FTSE 250 off 1.3%

May 19 (Reuters) - UK's FTSE 100 tumbled on Thursday as investors globally fretted over the broadening impact of inflation on economic growth and corporate profits, while Royal Mail slumped after reporting disappointing results.

The export-oriented FTSE 100 dropped 1.8%, joining a rout in global markets, with the stronger pound weighing on consumer companies.

Unilever, Diageo, Reckitt Benckiser , and British American Tobacco were down between 1.7% and 5.3%, while supermarket chain Tesco dropped nearly 4.1%.

Investors wiped almost 25% off U.S. retailer Target's shares on Wednesday after its profit halved, and it fell another 4.9% on Thursday.

"Target is more of a discount retailer. The expectation would've been that they may have not been hit so badly by the slowdown in consumer spending. Inflation hit them worse," said Chris Beauchamp, chief market analyst at online trading platform IG.

"You're seeing that across the retailers this morning in Europe, (they're falling) on expectation that they will also take a hit. There is no hiding place on the bad news."

Royal Mail was fell 12.4% to its lowest level since December 2020 after its full-year profit came in slightly below market expectations and the postal company warned of margin pressures in the United States.

Oil and gas stocks also declined as worries about slowing global economic growth knocked crude prices.

Data this week showed British inflation hit a 40-year peak in April, deepening worries about the pain inflicted on consumers and a potential recession.

The FTSE 100 and the domestically focussed midcap indexes have lost almost 2% so far this week.

On Thursday, housebuilder Countryside Partnerships Plc slid 1.6% after it posted a lower half-year profit as the group recovers from operational issues including costly expansions and losses from manufacturing businesses.

Low-cost carrier easyJet inched 0.1% higher after saying that bookings in the past 10 weeks were consistently above pre-pandemic levels.

HomeServe jumped 10.2% to the top of the midcap index after Canada's Brookfield Asset Management said it had agreed to buy the British home repair services firm for 4.08 billion pounds ($5.04 billion). (Reporting by Sruthi Shankar and Amal S in Bengaluru; Editing by Subhranshu Sahu and Aditya Soni, William Maclean)

© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BRITISH AMERICAN TOBACCO PLC 2.26% 3503.5 Delayed Quote.25.43%
BROOKFIELD ASSET MANAGEMENT INC. 2.58% 58.48 Delayed Quote.-23.45%
COUNTRYSIDE PARTNERSHIPS PLC -0.76% 235.7965 Delayed Quote.-47.20%
DIAGEO PLC 2.81% 3605.5 Delayed Quote.-13.11%
EASYJET PLC 3.33% 357.333 Delayed Quote.-37.86%
FTSE 100 1.66% 7141.76 Delayed Quote.-4.86%
HOMESERVE PLC 0.09% 1168 Delayed Quote.33.45%
RECKITT BENCKISER GROUP PLC 1.83% 6330 Delayed Quote.-1.99%
ROYAL MAIL PLC -0.71% 267.2 Delayed Quote.-46.82%
TESCO PLC 1.17% 258.5 Delayed Quote.-11.87%
UNILEVER PLC 1.32% 3853 Delayed Quote.-3.66%
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