UPDATE 1-UK midcaps at two-month lows in dour start to new quarter

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* UK mid-caps to record worst week since October 2020

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* AO World slowdown weighs in as supply chain disruption

*Software provider Sage will cut 800 jobs globally

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* FTSE 100 down 1%, FTSE 250 0.9% (updates price, adds comment)

Oct 1 (Businesshala) – British mid-cap shares fell to two-month lows on Friday after shares of pub operator Weatherspoon and electrical goods retailer AO World took a hit on earnings from supply chain disruptions and staff shortages. warned of.

The blue-chip FTSE 100 index fell 1%, with oil and mining stocks, financials and retailers among the worst performers.

The domestically focused mid-cap index dropped 0.9% and was set to record its worst week since October last year, hit by a slump in travel and leisure stocks.

AO World fell 17.6% after a slump in first-half revenue due to a lack of delivery drivers, while Weatherspoon dropped 1.2% when it nearly doubled its annual loss due to COVID-19 restrictions.

“I think it [AO World and Boohoo] Franziska Palmas, market economist at Capital Economics, said, “This concern may have played a role in the supply crunch starting to impact economic activity and therefore played a role in the general mood that we have seen recently. “

Boohoo shares fell to their lowest level since July last year on Thursday after the online fashion retailer warned of supply chain disruptions.

The FTSE 100 has gained nearly 9% so far this year and the mid-cap FTSE 250 index is up 11%, supported by optimism and easing central bank policies.

However, supply chain disruptions and increasing cost pressures due to higher energy prices have weighed on the UK economy, keeping the mid-cap index on track after a fourth consecutive week of decline, its worst since March 2020. is defeat.

Palmas said there are going to be some more economic recovery and some more gains in equity markets, but gains will be relatively small from now on as the pace of recovery is expected to slow in the United States and China.

Among other stocks, software company Sage fell 1.1% after it said it would cut more than 800 jobs worldwide.

GlaxoSmithKline dropped 0.9% after ending collaboration with Germany’s Merck KGA on cancer treatment. (Reporting by Bansari Mayur Kamdar; Editing by Sriraj Kalluvilla)


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