FTSE 250 heads towards correction territory as losses mount

Another day of losses yesterday has left the UK's main mid-cap index down almost 7% since the start of March - underperforming both large and small caps as warnings on valuations made at the start of the year ring true.

The FTSE 250 ex-ITs index dropped 1.3% yesterday, continuing the underperformance of recent weeks, as a broad sell-off prompts sharp falls for some of the best-performing stocks of 2013. Having risen some 31% last year, the index has dropped from a closing high of 18,295 on 28 February to as low as 16,950 yesterday - a 7.4% fall. The index eventually finished down 1.3% yesterday after a rally just prior to closing, though losses since 28 February still stand at 6.6%. By contrast, the FTSE 100 has fallen 3.3% over that period, and the FTSE Small Cap ex-ITs index, usually more volati...