* FTSE 100 down 0.1 pct, FTSE 250 down 0.7 pct
* UK stocks give up early gains as global markets turn
* Pearson gains 2 pct after sticking to guidance
* Mediclinic sinks 17 pct on weaker margins
* Inchcape falls as investors shun auto stocks (Updates prices, adds details)
By Helen Reid
LONDON, Oct 17 (Reuters) - Britain’s top stock index turned tail on Wednesday, tracking European shares lower as airlines took a dive and slumping crude prices dragged on oil majors, while mid-cap Mediclinic sank by nearly a fifth after its results missed estimates.
The FTSE 100 erased early gains to end the day down 0.1 percent, with BP and Shell the biggest drags. Oil prices fell below $70 for the first time in a month after a large increase in U.S. stockpiles.
As results rolled in, investors took earnings misses very badly, causing sharp drops in some stocks and collateral damage to the travel, housebuilding and autos sectors.
EasyJet suffered the biggest fall on the FTSE 100, down 5.1 percent amid a broader selloff in airlines.
Traders pointed to a profit warning from Flybe which sent that stock down 40 percent, and more gloomy forecasts from Ryanair CEO Michael O’Leary who said a hard Brexit could ground UK flights for up to three weeks.
Tour operator TUI fell 3.2 percent while mid-cap peer Thomas Cook tumbled 7.7 percent.
Flybe cited weakening demand, higher fuel costs and a weaker British pound as reasons for its forecast of a substantially larger loss for the current financial year.
A weak update from mid-cap housebuilder Crest Nicholson sent the shares down 8.2 percent. That weighed on FTSE 100 housebuilders Persimmon, Taylor Wimpey, and Berkeley Group which lost 2.2 to 2.7 percent.
Crest Nicholson warned its full-year profit would be lower than expected, citing a challenging real estate market, and said its chief financial officer had stepped down.
Shares in catering firm Compass Group fell 3.5 percent after Morgan Stanley analysts cut their earnings estimates and price targets ahead of its results.
“We are increasingly concerned about signs of rising competition ... and some structural threats such as digital disruption and evolving working practices,” MS analysts wrote.
Among rare gainers, education publisher Pearson rose 2 percent after it stuck to its target of returning to profit this year.
“The education giant has been shifting away from more traditional classroom materials in favour of digital, and progress there looks more positive,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
Overall, analysts are downgrading their earnings estimates for the FTSE 100 as well as the mid-cap FTSE 250 index, which fell 0.8 percent on Wednesday.
“Valuations don’t look particularly stretched in absolute terms, but the earnings newsflow is still mixed at best,” said Ian Williams, strategist at Peel Hunt.
The mid-cap segment, home to more growth stocks, fell in last week’s selloff as investors seemed to turn back to value plays. Growth still had its attractions, though.
“You can be too gung-ho about saying I’m rotating into value, if the earnings are still quite disappointing,” said Williams.
Mid-caps saw big moves after results and broker notes. Mediclinic shares sank 17 percent to a record low after its earnings and margins missed estimates, hit by weaker performance in its Swiss segment.
“Investors will likely be disappointed by Swiss performance while revised margin guidance may imply another leg down in the Swiss story, introducing further uncertainty,” wrote UBS analysts.
Shares in car dealership Inchcape tumbled 13 percent after HSBC analysts slashed their target price on the stock, flagging risks to earnings as new car volumes in the UK and Australia are falling.
Inchcape’s decline contributed to a 2 percent fall in European auto and suppliers’ shares after Goldman Sachs warned of a “challenging” quarter for the sector.
Asos provided a rare ray of optimism for the retail sector, its shares jumping 17.7 percent after the online fashion retailer said its potential was “huge”. It beat profit forecasts and maintained guidance for its new financial year.
“Asos’ positive statement should reassure investors today, concerned by recent disappointments in the retail sector,” said Stifel analysts.
Reporting by Helen Reid; editing by Larry King and Andrew Roche