FTSE 100 tumbles 2% on global slowdown worries

There is no hiding place on the bad news." Royal Mail was trading down 8.6% at 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.

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 blue-chip index dropped 2.1%, joining a rout in Asian and European markets after Wall Street's main indexes sank overnight due to a warning on margins from retail giant Target.

British consumer companies such as Unilever, Diageo and Reckitt Benckiser fell between 2% and 4%, while supermarket chain Tesco dropped nearly 5%. "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 the expectation that they will also take a hit. There is no hiding place on the bad news." Royal Mail was trading down 8.6% at 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 3.6% 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 slipped 0.4% despite saying that bookings in the past 10 weeks were consistently above pre-pandemic levels. HomeServe jumped 10.6% 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).

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)