By Shivani Kumaresan and Devik Jain
(Reuters) - British stocks clocked their worst day since late October on Tuesday after a sudden drop in big U.S. tech stocks 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 slid 2.6%, dragged down by heavyweight banks, life insurers and miners.
All the FTSE 100 constituents were trading in negative territory.
The domestically focused mid-cap FTSE 250 index tripped 2.3%.
Travel and leisure stocks slipped 4.0%, with British Airways owner IAG (LON:ICAG) falling the most, after it launched an 800 million euro ($971.52 million) convertible bond due in 2028 to strengthen its balance sheet.
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 coronavirus pandemic in some major economies. [MKTS/GLOB]
"With China and the U.S., the world’s two largest economies, showing signs of rising inflationary pressures, investors are getting nervous," said Sophie Griffiths, Market Analyst, UK & EMEA, at ONANDA.
"The overriding fear is that pandemic stimulus combined with reopening economies will spark a sharp drive high in inflation, forcing central banks to take action, tightening policy and potentially slowing down economic recovery."
The FTSE 100 has gained about 7.2% year-to-date on optimism that speedy COVID-19 vaccinations and constant policy support from the government would drive a stronger economic recovery.
Beauty and lifestyle e-commerce company THG surged 11.7% after it raised more than $1 billion in new equity, including $730 million from Japan's Softbank Group. [nL4N2MY1HU]
NatWest slid 3.5% after the UK government completed a 1.1 billion pound ($1.55 billion) share sale at a discounted price. [nL8N2MY1LI]