Shares in Royal Mail tumble after FedEx fails to deliver

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Shares in Royal Mail sank to a fresh low on Wednesday, after US parcel firm FedEx cut its full-year outlook and warned of weakness in Europe.

By 1330 GMT, Royal Mail was trading down 3% at 277p. Earlier in the session it had touched 274p, a joint record low.

Investors were unnerved by the latest numbers from FedEx, which is largely regarded as a bellwether US stock. It blamed slowing global trade as it downgraded the bottom end of its earnings guidance for 2019, by $1.70 a share to between $15.50 and $16.60 a share, and announced a raft of cost saving measures.

Chief executive Frederick Smith said: "While the US economy remains solid, our international business weakened during the quarter, especially in Europe. We are taking action to mitigate the impact of this trend through new cost-reduction initiatives."

Michael Hewson, chief markets analyst at CMC Markets, said: "Royal Mail shares have slipped to a new record lows on the back of the FedEx’s poor numbers last night after the close in the US.

"Europe was a particular weak spot and the weak outlook saw UPS shares also come under pressure in aftermarket trading."

Shares in fellow American parcel firm United Parcel Service fell 4% in pre-market trading on Wednesday, while FedEx tumbled