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FTSE 100 Retreats As Airline Stocks Drag

U.K. markets fell on Wednesday as a bearish note from HSBC following Lufthansa's profit warning pulled down airline stocks. Better-than-expected earnings from housebuilder Berkeley failed to boost sentiment.

The benchmark FTSE 100 was down 30 points or 0.40 percent at 7,412 after rising 1.2 percent in the previous session.

British Airways owner IAG slumped 5.3 percent and easyJet tumbled 3.5 percent after HSBC said it is increasingly cautious towards European airlines.

Likewise, online food order and delivery service Just Eat tumbled 3.2 percent after a rating cut by UBS.

Berkeley Group Holdings declined 2.3 percent, surrendering early gains after the property developer posted a smaller-than-expected fall in annual profit.

Insurance and tourism firm Saga plunged nearly 12 percent after the company warned on conditions in its travel business amid political uncertainty in the U.K.

Construction and services company Kier Group soared 9 percent to extend gains from the previous session.

Whitbread traded flat after delivering a resilient performance in the first quarter despite more challenging market conditions.

On the data front, U.K. inflation slowed to the central bank target in May, as widely expected, data from the Office for National Statistics showed.

Consumer price inflation came in at 2 percent in May versus 2.1 percent in April. The rate matched expectations. The annual decline was largely driven by air fares and falling car prices.

Another report showed that U.K. house price inflation slowed in April after accelerating in the previous month.

Average house prices rose 1.4 percent year-on-year following a 1.6 percent increase in March. In February, house price inflation was 1.2 percent.

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