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FTSE 250 stumbles after Ireland sounds Brexit risk

Written by Business World, on 9th Jul 2019. Posted in World

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Britain's mid-cap index fell for the third straight session on Tuesday as Ireland dialed up concerns over the risk of a no-deal Brexit, while online grocer Ocado jumped on the FTSE 100 after backing its annual forecast.

The main index fell 0.3% and the mid-cap FTSE 250 shed 0.4% by 0800 GMT.

Ireland's finance minister warned of significant risk of a disorderly Brexit and said the country was preparing to protect itself from any legal consequences as a result.

More than three years after a referendum to exit from the European Union, there is still little clarity on how and on what terms Britain will separate from the bloc, which has stunted domestic economic growth and severely pressured the pound.

Dublin's main index, generally sensitive to Brexit jitters and often considered a gauge of risk sentiment, slipped 0.9%.

Shares of airlines and tourism companies took a hit from the increasing uncertainty. TUI fell 3.3%, British Airways owner IAG lost 2%, while easyJet and Thomas Cook gave up 3.5% each.

The FTSE 100 took a back seat to the domestic index, but was led lower by losses in miners, as copper prices continued their recent slide on worries over waning demand from top consumer China.

However, a 7.1% surge in Ocado helped limit some losses after the company affirmed its annual forecast, even though its first-half core earnings nearly halved, partly due to the impact of a fire at its flagship robotic warehouse.

Shares of the company were on track for their best day since late February.

Meanwhile, global markets continued to scale back bets of a hefty rate cut by the U.S. central bank. Fed Chair Jerome Powell will deliver his semi-annual testimony later today, while key points from the last Fed meeting are expected tomorrow.

"This is the key period that will either see the Fed crystallize market expectations for a cut later this month, or gently nudge them back towards a more neutral position," Markets.com analyst Neil Wilson said.

A sub-index of chemical companies slipped nearly 2% to a one-month low and underperformed the broader index, after German chemicals giant BASF issued a heavy profit warning.

Melrose, which splurged 8 billion pounds last year to buy aerospace and automotive parts supplier GKN, tumbled nearly 6%, with a trader tentatively citing the fall to BASF's warning on the auto industry.

Shares of Johnson Matthey fell almost 3%. (Reuters)

Source: www.businessworld.ie

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