Dechra Pharmaceuticals slides on discounted placing
Frasers surges on upbeat earnings forecast
FTSE 100 down 0.6, FTSE 250 adds 0.2

July 21 Reuters UK39;s FTSE 100 dipped on Thursday as a deepening political crisis in Italy and an imminent European Central Bank policy decision weighed on investor mood across Europe, while positive corporate earnings reports supported the midcap index.

The bluechip FTSE 100 fell 0.6, largely inline with losses in the broader European equities benchmark.

Worries over an energy supply crunch in Europe eased as gas began flowing again along the biggest pipeline from Russia to Germany, though an expected interest rate hike in Europe and Italian Prime Minister Mario Draghi39;s resignation weighed.

Despite a severe costofliving crisis in the UK, the FTSE 100 has outperformed its global peers this year due to its heavy exposure to commodities and defensive sectors.

However, growing worries about a global recession have led to doubts if the index can continue to shine in the second half of the year.

Peaking inflation dynamics and rising global recession risks will likely lead to a rotation back into quality and, to some extent, growth names, said Mathieu Racheter, head of equity strategy research at Julius Baer.

We, therefore, see more downside risks to UK equities compared to their U.S. and European peers from current levels in case a recession materialises.

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