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* Dunelm gains on strong FY results, upbeat 2022 profit forecast
* Smiths Group gains on ICU Medical deal
* FTSE 100 down 0.7%, FTSE 250 off 0.9%
Sept 8 (Reuters) - London's FTSE 100 slipped for a second session on Wednesday, dragged by pharmaceutical and bank stocks, while Dunelm Group jumped to the top of the mid-cap index after posting upbeat annual results.
The blue-chip FTSE 100 index ended 0.7% down, as pharmacuetical stocks weighed with drugmakers AstraZeneca and GlaxoSmithKline among top drags.
Banking shares shed 1.2%, with big lenders Barclays and Lloyds Banking Group slipping 1.6% and 2%, respectively, after Morgan Stanley cut its price targets on the stocks.
The FTSE 100 has gained 10% so far this year, but continues to lag its European and U.S. peers as worries around a spread of Delta variant of coronavirus and supply chain issues sparked concerns of a slowdown in economic growth.
"Supply chain issues are putting pressure on companies around the world, with the UK particularly affected because of driver shortages," said Russ Mould, investment director at AJ Bell.
"It is one of the biggest threats to the post-COVID recovery story and certainly shows no sign of easing as we enter the final part of 2021."
Halfords Group dropped 1.9% after the bikes and car parts retailer said disruption in the global supply chain was impacting its cycling business.
All eyes this week will be on the European Central Bank's policy meeting, where the central bank is expected to debate tapering its own stimulus.
The domestically focused mid-cap FTSE 250 index declined 0.9%, recording its worst session in nearly three weeks.
Dunelm Group up 12.4% jumped to the top of mid-cap index after the home furnishing retailer declared a special dividend and forecast fiscal 2022 profit to be modestly above analysts' forecasts.
B&M jumped 7% after the discount retailer forecast first-half profit well above market estimates on Wednesday, thanks to stronger-than-expected margins at its UK stores. 12.4
Smiths Group rose 2.9% after the technology company agreed to sell its medical unit to U.S.-based ICU Medical Inc for $2.4 billion. (Reporting by Devik Jain and Amal S in Bengaluru; Editing by Bernadette Baum)