By Johann M Cherian
(Reuters) -The UK's blue-chip FTSE 100 index eased on Wednesday as Marks & Spencer's dire cost outlook rattled retailers, while uncertainty around the outcome of a tightly contested U.S. midterm election kept investors on edge.
The index slipped 0.1%, while the domestically-oriented FTSE 250 fell 0.3%.
Marks & Spencer dropped 3.4% as it warned of a "gathering storm" of higher costs and pressure on household budgets, while reiterating that full-year profits would fall.
"M&S doesn't sit in the luxury space where the clientele is insulated from cost-of-living pressures nor does it offer the kind of value on offer from discount chains and grocers," said AJ Bell investment director Russ Mould.
The broader retail sector fell 0.3%. The sub-index has slumped nearly 38% this year as businesses struggle to beat falling demand and rising costs.
Investors braced for U.S. inflation data due on Thursday and waited on the results of the midterm election that could signify a power shift in Washington. [MKTS/GLOB]
U.S. Republicans made modest gains but Democrats performed better than expected, leaving control of the Senate hinging on three races that remained too close to call on Wednesday.
Elsewhere, broadcaster ITV fell 4.3% as it forecast slightly lower ad revenue for 2022 and flagged a high degree of economic uncertainty.
FirstGroup tumbled 9.9% after the British transport firm reported lower first-half revenue.
(Reporting by Johann M Cherian in Bengaluru; additional reporting by Sruthi Shankar and Shristi A Achar editing by Uttaresh.V, Devika Syamnath, Kirsten Donovan)