(Reuters) - London-listed companies with exposure to the domestic economy retreated on Monday as last week’s euphoric optimism gave way to doubts over whether a timely Brexit deal could be clinched, while cybersecurity firm Sophos surged 36% after a buyout offer.
The FTSE 250 .FTMC ended slightly off the day's lows but still shed 0.6%, handing back part of the more than 4% gain it had recorded in the previous session which was its best in nearly a decade.
Britain and the European Union said over the weekend that a lot more work would be needed to secure a Brexit agreement.
JP Morgan’s UK domestic plays index .JPDEUKDM, tracking about 30 UK stocks that make all or most of their revenue at home, pulled back nearly 1%. It had jumped almost 8% on Friday, its best day since the basket was created nearly three years ago.
“On balance I feel the situation here is still fairly unpredictable... I think it’s far from clear we have a pathway yet,” said Paul O’Connor, head of the UK-based Multi-Asset Team at Janus Henderson.
The main index was also hurt by a drop in miners .FTNMX1770 after disappointing imports and exports data from top metals consumer China.
Mid-cap Sophos Group (SOPH.L) scaled its highest level in more than a year at 586.8 pence, after private equity firm Thoma Bravo said it would take the company private in a 583 pence per share deal.
Shares of its peer Avast (AVST.L) also rose 2.6%.
Sentiment around the U.S.-China trade situation also tempered somewhat after a rally in global stocks last week on signs of progress in negotiations that culminated with President Donald Trump outlining the first phase of a deal and suspending a threatened tariff hike.
“We welcome it but it’s a very fragile truce. The fact that it wasn’t written down is the most important thing. It shows what a challenge it is to converge on a hard agreement,” O’Connor said.
Car dealership chain Pendragon (PDG.L), whose stock has nearly halved in value this year, climbed 10%. Automotive News reported here Pendragon had named interim Executive Chairman and former AutoNation (AN.N) COO Bill Berman as interim CEO.
GRAPHIC: Share performance of Sophos and Avast vs FTSE 250 since 2018 - here
Reporting by Shashwat Awasthi in Bengaluru, additional reporting by Josephine Mason in London; Editing by Bernard Orr and Ed Osmond