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UPDATE 1-British shares drop more than 2% on inflation woes; THG outperforms

05/11/2021 04:34
UPDATE 1-British shares drop more than 2% on inflation woes; THG outperforms

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Softbank leads $1 bln investment in Britain's THG, shares surge

NatWest slips as Britain lowers stake with $1.5 bln share sale

FTSE 100 down 2.4%, FTSE 250 off 2.1%

Adds comment, details; updates prices

By Devik Jain

- British stocks tracked Asian markets lower on Tuesday, after an overnight tech sell-off on Wall Street over inflation concerns, while shares of THG Plc eyed their best day on record on raising more than $1 billion in new equity.

The blue-chip index .FTSE slid 2.4%, dragged down by heavyweight banks .FTNMX301010, life insurers .FTNMX303010 and miners .FTNMX551020.

All the FTSE 100 constituents were trading in negative territory.

The domestically focused mid-cap FTSE 250 index .FTMC tripped 2.1%.

Travel and leisure .FTNMX405010 stocks slipped 3%, with British Airways-owner IAG ICAG.L falling the most, after it launched an 800 million euro ($971.52 million) convertible bond due in 2028 to strengthen its balance sheet. nASN0016HK

Globally, tech stocks took a beating as investors braced for U.S. inflation data due on Wednesday, while keeping a close eye on a host of Federal Reserve speakers this week to assess how authorities are likely to respond to receding risks posed by the pandemic in some major economies. MKTS/GLOB

"With inflation resurging, it's expected that the increase in interest rates will come sooner rather than later and a rollback of this huge bond buying stimulus program unleashed in the United States, the UK, European Union, other countries around the world as the economies recover," said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown.

"We are seeing two steps forward, one step back pattern... we'll see resurgence in confidence, and then that confidence is likely to be knocked back a little."

The FTSE 100 is tracking its worst daily performance in over two months, while the FTSE 250 is set for its biggest intraday percentage fall since Dec. 21.

Beauty and lifestyle e-commerce company THG THG.L surged 12.6%, after it raised more than $1 billion in new equity, including $730 million from Japan's Softbank Group 9984.T. nL4N2MY1HU

NatWest NWG.L slid 3.6% after the UK government completed 1.1 billion pound ($1.55 billion) share sale at a discounted price. nL8N2MY1LI



($1 = 0.8235 euros)


(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)

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