June 27, 2019 / 7:29 AM / 5 months ago

FTSE 100 slips on uncertain U.S.-China trade prospects

(Reuters) - London’s FTSE 100 ended lower on Thursday as initial investor optimism gave way to uncertainty amid conflicting reports on whether Washington and Beijing would commit to a trade truce, while Glencore skidded after a mine collapse in Congo.

A broker reacts on the IG Index the trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

The FTSE 100 .FTSE closed 0.2% lower, after slipping as much as 0.5%. The mid-cap FTSE 250 .FTMC added 0.3%, helped by a relatively steady pound.

Markets had initially welcomed signs of progress in the trade talks after the South China Morning Post, citing sources, said the United States and China had agreed to a truce before leaders of the two nations meet at the G20 summit.

That helped shares of Asia-focussed banks such as HSBC (HSBA.L) and miners such as Rio Tinto (RIO.L) gain on the FTSE 100.

However, the blue-chip index’s fortunes reversed after The Wall Street Journal reported that Chinese officials would insist on the removal of sanctions on technology firm Huawei, among other proposals, as part of any agreement.

“There are decent signs that the apparent return of poise to risky assets may not run deep,” Cityindex analyst Ken Odeluga said.

“We can now expect an awful lot of newsflow on trade and tariffs over the next two days, so it’s wise to be cautious about reading too much into statements,” Markets.com analyst Neil Wilson said.

Glencore (GLEN.L) gave up 5%, its biggest one-day fall in almost a year, after a mine owned by the company collapsed in southwest Congo. The company confirmed that 19 artisanal miners had died and warned of possible further fatalities. [nL8N23Y583

But home improvement retailer Kingfisher (KGF.L) added 4.2% after it named Carrefour’s (CARR.PA) Thierry Garnier as its new chief executive.

Mid-cap Senior (SNR.L), which makes a variety of components used in commercial and military jets and counts Boeing (BA.N) as one of its top customers, tumbled 10% on news that U.S. regulators had identified a new risk to Boeing’s grounded 737 MAX.

The stock endured its worst day in more than 2-1/2 years as a rating downgrade from Barclays also weighed.

Shares of Pendragon (PDG.L), hammered earlier this month after a profit warning, slid 5.7% after the car dealership said its chief executive would step down because of a “difference in priorities”, delaying its strategic review.

“We maintain our view that Pendragon’s problems are multiple and deep-rooted and that any management team will face an uphill challenge in the current trading environment,” Liberum analysts wrote.

Reporting by Shashwat Awasthi in Bengaluru; Editing by Jan Harvey and Mark Potter

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