FTSE 100 slips on global trade worries; pub chain Ei surges after deal

Credit: REUTERS/TOBY MELVILLE

Britain's FTSE 100 followed other major stock markets lower on Thursday as initial batches of corporate earnings jangled nerves over global growth, while losses for London's mid-cap index were capped by a buyout of pub operator Ei Group.

By Shashwat Awasthi

July 18 (Reuters) - Britain's FTSE 100 followed other major stock markets lower on Thursday as initial batches of corporate earnings jangled nerves over global growth, while losses for London's mid-cap index were capped by a buyout of pub operator Ei Group.

All but one of the blue-chip index's .FTSE sectors were in the red as it shed 0.4%. The mid-cap FTSE 250 .FTMC lost 0.3% by 0800 GMT.

Slug and Lettuce owner Stonegate Pub Company IPO-SPC.L agreed to buy Ei Group EIGE.L for 285 pence a share, a 38% premium to Wednesday's close, which sent the mid-cap pub chain's stock to its highest in more than a decade.

The stock surged nearly 39% and helped fellow mid-cap pub operators Mitchells & Butlers MAB.L, Greene King GNK.L and Marston's MARS.L rise between 1.1% and 2.9%.

"We believe the acquisition rationale is compelling and given the outlook for UK consumer and property valuation, could be attractive to Ei Group shareholders," Liberum analysts said.

Meanwhile, effects of a protracted Sino-U.S. trade dispute on corporate earnings and worries that trade tensions could further escalate have turned investors across the globe risk-averse.

While U.S. railroad operator CSX CSX.O and German tech heavyweight SAP SAPG.DE have flagged trade war impact, a report that progress towards a trade deal had stalled weighed on sentiment.

After a slump in May due to rising worries that Washington's trade war with China and other partners would escalate, the FTSE 100 has steadied and is on course for its best year since 2016.

The exporter-heavy index's gains have been fuelled by hopes of interest rate cuts by central banks and the plummeting value of the pound due to concerns around the Conservative leadership election and risks from Brexit.

AIM-listed ASOS ASOS.L tanked 11%, as it blamed operational issues for its third profit warning in eight months.

Its shares were on track for their worst day since December, when the online fashion retailer's previous warning had triggered a global retail sell-off.

Luxury brand Burberry BRBY.L, which is on course for its best week in more than a decade after posting robust sales growth on Tuesday, gave up 1.5%.

The mid-cap index was also supported by a 3.3% gain in budget airline easyJet EZJ.L, which re-affirmed its annual profit forecast, reassuring investors despite softening demand in the industry due to Brexit-driven consumer uncertainty.

(Reporting by Shashwat Awasthi in Bengaluru; editing by Patrick Graham and Arun Koyyur)

((Shashwat.Awasthi@thomsonreuters.com; within U.S.+1 646 223 3403; outside U.S. +91 80 6749 3403; Reuters Messaging: shashwat.awasthi.thomsonreuters.com@reuters.net))

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