(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* Power generators hit by report of windfall tax
* Royal Mail slides as Peel Hunt downgrades to sell
* FTSE 100 down 0.4%, FTSE 250 off 1.5%
May 24 (Reuters) - UK's FTSE 100 fell on Tuesday, tracking a
sour global mood with energy stocks leading declines and shares
of British utilities slumped after a media report fueled
speculation of a windfall tax.
The benchmark FTSE 100 fell 0.4% with oil majors
Shell and BP among top drags, while the midcap
FTSE 250 dipped 1.5%.
UK power generating companies Drax, Centrica
and SSE plunged between 13.8% and 7.9% after the
Financial Times reported that the British government planning a
possible windfall tax on more than 10 billion pounds ($12.48
billion) of excess profits by electricity generators.
The wider utilities index dropped 0.6%.
"The expectation is that this would be linked to the amount
of cash poured into ESG initiatives to power the energy
transition but also potentially in terms of measures taken by
companies to ease the burden of high bills for cash strapped
customers," said Susannah Streeter, senior investment and
markets analyst, Hargreaves Lansdown.
"However, we will have to wait for any detail of any plan to
establish how much of a hit such a levy, if it is introduced,
could have to the bottom line."
Wall Street's main indexes fell on Tuesday, with the
tech-heavy Nasdaq leading the slump, as a weak earnings forecast
from Snapchat-owner Snap Inc added to nerves about an
Advertising group WPP tumbled 9.3% and broadcaster
ITV dropped 4.9%.
A business survey showed Britain's economic momentum slowed
much more than expected this month, adding to recession worries
as inflation pressures mount.
Royal Mail slid 5.5% after Peel Hunt downgraded the
stock to "sell" from "buy," saying it now assumes no dividends
Restaurant Group Plc slipped 2.3% despite saying
strong sales at Wagamama and its Frankie & Benny's chain of
restaurants were helping offset the impact of inflation on
($1 = 0.8012 pounds)
(Reporting by Sruthi Shankar and Amal S in Bengaluru; editing
by Uttaresh.V and Rashmi Aich)