Banks, miners drag FTSE 100; Thomas Cook collapse lifts rivals

Credit: REUTERS/Peter Nicholls

London's FTSE 100 index shed early gains on Monday as losses in banks and miners due to a lack of clarity in U.S.-China trade talks more than offset a rise in shares of travel operators and airlines after the collapse of Thomas Cook.

By Muvija M and Shashwat Awasthi

Sept 23 (Reuters) - London's FTSE 100 index shed early gains on Monday as losses in banks and miners due to a lack of clarity in U.S.-China trade talks more than offset a rise in shares of travel operators and airlines after the collapse of Thomas Cook.

The FTSE 100 .FTSE fell 0.6% by 0830 GMT, while the FTSE 250 midcaps index .FTMC shed 0.7%, as mixed signals emerged from trade negotiations between the world's top two economies.

An index of banks .FTNMX8350 slipped 2%, dragged by Asia-facing financials, while the broader mining index .FTNMX1770 dipped 1%.

The U.S. Trade Representative's office said on Friday that U.S. and Chinese deputy negotiators held "productive" talks in Washington, but markets were left underwhelmed after Chinese agriculture officials cancelled a trip to U.S. farm states.

The FTSE 100, whose constituents bring in more than two-thirds of their profits from abroad, saw its steepest monthly fall this year in August when trade tensions between the United States and China escalated.

While the index has enjoyed the benefits of a weakness in pound for most of 2019 as a painful Brexit process plays out, recent steps by lawmakers in preventing a no-deal Brexit has brought gains for the currency and in turn weighed on exporters.

The FTSE 100 has gained just 8.4% so far in the year, well behind its European counterpart's .STOXX 15.1% rise.

Helping limit Monday's losses were surges in tour operator TUI TUIT.L, airlines Ryanair RYA.L, British Airways owner IAG ICAG.L and easyJet EZJ.L as traders bet the Thomas Cook bankruptcy would cut some overcapacity in the market.

"The effects will be felt across the sector, not all bad... airlines are firmer today as they should feel the benefit from the abrupt loss of short haul capacity," Markets.com analyst Neil Wilson said.

Marks & Spencer MKS.L lost 4.5% after it announced the abrupt departure of its chief financial officer.

AstraZeneca AZN.L rose 1% after its diabetes treatment Qtrilmet moved a step closer to European Union approval on Friday.

Thomas Cook share performance vs other UK tour and related companieshttps://tmsnrt.rs/30JK2NT

(Reporting by Muvija M and Shashwat Awasthi in Bengaluru; editing by Patrick Graham and Saumyadeb Chakrabarty)

((muvija.m@tr.com; within UK +44 20 7542 1810, outside UK +91 80 6749 3638;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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