UPDATE 2-FTSE 100 slides as EU, BoE slash growth forecasts, TUI tumbles

  • Reuters
  • Stock Market News
UPDATE 2-FTSE 100 slides as EU, BoE slash growth forecasts, TUI tumbles
Credit: © Reuters.

* FTSE 100 down 1.1 pct; FTSE 250 down 1.4 pct

* TUI slumps after slashing forecast

* Ocado down for second straight day

* WPP falls on rival Publicis' poor results

* Caterer Compass at record high after Q1 update

(Adds BoE comments, changes analyst quote, updates to closing prices)

By Muvija M and Shashwat Awasthi

Feb 7 (Reuters) - Britain's blue-chip index fell sharply on Thursday as economic growth concerns resurfaced after the Bank of England joined the European Commission in cutting its growth forecast amid Brexit uncertainty, while tour operator TUI plunged after poor results.

The FTSE 100 .FTSE ended down 1.1 percent, well away from the more than three-month high it hit earlier in the session, while the FTSE 250 .FTMC slid 1.4 percent.

Both indexes suffered their worst day since December, but still fared better than European bourses and Wall Street, which was hit by a report U.S. President Donald Trump and Chinese premier Xi Jinping were unlikely to meet before a March 1 deadline that could see Washington impose more tariffs on Chinese goods.

London-listed shares of TUI AG TUIGn.DE TUIT.L slumped 19 percent, their biggest ever fall, after the tour operator slashed its profit view for the fiscal year, blaming weakness in the pound and hot weather last summer which it said discouraged people from booking trips abroad. fire at Ocado's OCDO.L flagship robotic distribution centre has wiped out more than a billion pounds off its market value in the last two days as the online grocer expects the incident to hit sales growth. The stock fell 10 percent on the day.

Worries about a slowdown in global economic growth re-emerged as the European Commission sharply cut its economic growth forecasts in the euro zone for this year and next in light of ongoing trade tensions. a similar vein, the BoE said mounting Brexit uncertainty and the global slowdown would lead to Britain facing its weakest growth in a decade this year and slashed its 2019 growth forecast. (sign that there would probably not be a rate hike in 2019) is somewhat of a shift and appears in lock step with the dovish tilt we have seen from other major central banks in recent months," Markets.com analyst Neil Wilson said.

In Brussels, the European Union promised to work with British Prime Minister Theresa May on ways to potentially avoid the disruption of a no-deal Brexit as a March 29 exit deadline draws near.

CMC Markets analyst Michael Hewson, however, said it seemed highly unlikely May would get the changes she wants to the proposed withdrawal agreement before next week's vote in the House of Commons, adding that the possibility of the vote itself was "looking increasingly unlikely".

RBS RBS.L slipped 4 percent after a report the British government would consider trimming its stake in the bank.

Advertising agency WPP WPP.L slumped 8.4 percent to a more than six-year low after French rival Publicis PUBP.PA reported a fall in revenues for the fourth quarter - far weaker than the market expected. Compass Group CPG.L , the world's biggest catering firm, climbed 3.7 percent to a record high after reporting higher first-quarter organic revenue and providing a bullish full-year forecast. firm Petrofac PFC.L lost nearly a third of its value after a former executive pleaded guilty to bribery as part of an ongoing Serious Fraud Office investigation. and poultry producer Cranswick CWK.L slumped 12.6 percent, on track for its worst day in more than 7-1/2 years, after quarterly results. the small caps index, tour operator Thomas Cook TCG.L jumped 10 percent, reversing early losses, after it put its airline business up for sale to raise cash and help steady operations after a rough 2018.

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