July 9, 2019 / 7:36 AM / 11 days ago

FTSE 250 stumbles as Brexit worries bite; Ocado shines

(Reuters) - Britain’s mid-cap index fell for the third straight session on Tuesday amid a deteriorating economic outlook and Brexit tensions, while online grocer Ocado jumped on the FTSE 100 after confirmed its annual forecast.

FILE PHOTO: A broker at IG Index looks at her screens in the City of London February 25, 2013. Sterling hit a two-and-a-half year low against the dollar and a 16-month trough against the euro on Monday after ratings agency Moody's stripped the UK of one of its prized triple-A ratings, rounding off a week of woe for the currency. REUTERS/Andrew Winning

The main index .FTSE fell 0.2% and the mid-cap FTSE 250 .FTMC shed 0.6%, as a hefty profit warning from German chemicals giant BASF (BASFn.DE) rocked several industrial companies.

Sterling fell towards its lowest levels in more than two years, pressured by a cocktail of gloomy retail sales data and lingering fears of a ‘no-deal’ Brexit.

Rupert Harrison, portfolio manager and head of research for the diversified strategies team at BlackRock, said the outlook had deteriorated over the past three months, while the chance of an “extreme outcome” had risen compared with the probability of a managed exit.

“We’re relatively negative on the macro-economy. The cumulative impact of the (Brexit) uncertainty... has definitely had a negative impact on momentum,” Harrison said.

Dublin's main index .ISEQ, generally sensitive to Brexit jitters and often considered a gauge of risk sentiment, slipped 0.8%.

Shares of airlines and tourism companies took a hit from the increasing uncertainty. TUI (TUIT.L) and easyJet (EZJ.L) fell about 3%, British Airways owner IAG (ICAG.L) lost 1.6%, while Thomas Cook (TCG.L) gave up 5.1%.

The FTSE 100 took a back seat to the domestic index, but was led lower by losses in miners .FTNMX1770, as copper prices continued their recent slide on worries over waning demand from top consumer China.

However, Ocado (OCDO.L) surged 5.6% on its best day since late February after it 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.

A sub-index of chemical companies .FTNMX1350 slipped to a more than six-month low and underperformed the broader index, after BASF (BASFn.DE) warned on profit, citing impact from the U.S.-China trade dispute.

Shares of Melrose (MRON.L) tumbled 4.1% on the main index, while Bodycote (BOY.L), Vesuvius (VSVS.L) and Weir Group (WEIR.L) were among the top mid-cap losers.

Software firm Micro Focus (MCRO.L) declined 5.3% after a higher-than-expected drop in first-half licence revenue.

RHI Magnesita (RHIM.L), which sells products made with heat-resistant materials, skidded 5.9% on the FTSE 250 after announcing a placing of about 2.2 million shares.

Reporting by Shashwat Awasthi and Muvija M in Bengaluru, additional reporting by Josephine Mason in London; Editing by Arun Koyyur/Keith Weir

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