British Stocks Drop Amid European Market Losses as Halma Soars

British stocks closed lower on Thursday, with the FTSE 100 dropping 0.6% due to European market losses and investor reactions to the Federal Reserve's fewer US rate cut projections. Meanwhile, Halma rose significantly after surpassing revenue and profit estimates. Utilities and personal care stocks were minor gainers.

British stocks closed lower on Thursday, tracking European market losses as investors digested the Federal Reserve's projection for fewer US rate cuts this year, while health and safety equipment maker Halma soared after its results beat estimates.

The blue-chip FTSE 100 closed 0.6% lower, a day after its best day in over a month. The mid-cap FTSE 250 dipped 1.5%, in its worst day in nearly two months. Home construction and household goods slipped 2.8% as Crest Nicholson slumped 11.6% to the bottom of the FTE 250 after the homebuilder warned its annual profit would fall about one-third and posted an 88% slump in half-year earnings.

Utilities and personal care stocks were the only outliers with gains of 0.3% and 0.5%, respectively. The pan-European STOXX 600 was down 1.3%, its worst day since mid-April.

"Mood across the European markets is heavy today due to political uncertainty and strongly softer-than-expected EZ industrial production data," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. Meanwhile, the Fed kept rates unchanged on Wednesday, plotting one cut in the year, and pushing out the start to perhaps as late as December.

"The Bank of England is likely to cut earlier and a bit more aggressively than the U.S. because the UK economy has bottomed out," said Thomas Gehlen, senior market strategist at SG Kleinwort Hambros. A report also showed U.S. producer prices unexpectedly fell in May, in another sign of subsiding inflation.

Investors will now shift focus to the crucial domestic inflation report ahead of the Bank of England's next monetary policy meeting, both due in the next week. Among other individual stocks, Halma jumped 13.4% to the top of the FTSE 100 after the technology firm beat estimates for full-year revenue and core profit.

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