Industrial stocks drag UK equities, investors assess US-EU trade deal
The blue-chip FTSE 100 (.FTSE), opens new tab reversed earlier gains with a 0.4% fall, while the domestically focused midcap FTSE 250 index (.FTMC), opens new tab fell 0.8%.
The U.S. struck a framework trade agreement with the EU on Sunday, which imposes a 15% tariff on most EU goods and requires the bloc to invest around $600 billion in the United States.
However, some European capitals complained it was lopsided in favour of Washington.
Meanwhile, data showed on Monday a downturn in British retail sales extended into its tenth month in July as rising prices weighed on consumers, although the pace of the fall was less severe than in June.
Also on Monday, the U.S. and China met in Stockholm to resume talks to resolve longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months.
In the market, the industrial subindex (.FTNMX502050), opens new tab led the broader sectoral decline, down 1.6%, with RS Group (RS1R.L), opens new tab falling 3.1%.
Precious (.FTNMX551030), opens new tab and industrial (.FTNMX551020), opens new tab metal miners fell nearly 1% and 0.9% respectively, tracking lower gold and metal prices.
Conversely, energy stocks (.FTNMX601010), opens new tab rose 1.2% as oil prices rose.
Heavyweight BP (BP.L), opens new tab gained the most in the FTSE 100, up 2.2%.
Among individual stocks, Ocean Wilsons Holdings (OCN.L), opens new tab slipped more than 14% after the British investment holding company agreed to an all-share merger with Hansa Investment (HAN.L), opens new tab, creating a £900 million ($1.21 billion) diversified investment firm.
The Bank of England is expected to slow the pace soon at which it shrinks its 558 billion-pound ($754 billion) holdings of government bonds, with economists hoping for some clarity next week on the central bank's longer-term goals for the stockpile.
Traders are currently pricing in an 86.5% chance of a 25 basis point BoE interest rate cut on August 7, according to data compiled by LSEG.
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