(Reuters) - London's FTSE 100 dipped on Tuesday, as investors returning from a holiday-extended weekend overlooked U.S. President Donald Trump's softer stance on China, while office space provider IWG scaled a life-time high after reports of U.S. listing plans.
The FTSE 100 (FTSE) was 0.5% lower by 0820 GMT, starting off yet another week on the back foot after suffering declines for four consecutive weeks. If losses hold, the index is set for its worst monthly performance in more than seven years.
The FTSE 250 midcap index (FTMC) shed earlier losses and were flat, as the sterling gained after hopes of averting a potentially chaotic no-deal Brexit rose.
Prime Minister Boris Johnson said he was prepared to take Brexit talks with the European Union down to the very last minute before the Oct. 31 exit deadline. The opposition Labour Party leader, Jeremy Corbyn, also reiterated that he will do "everything necessary" to stop a no-deal departure.
That was another factor dragging on the exporter-heavy FTSE 100.
Sector-wise, Asia-focused financial stocks including HSBC (L:HSBA) and Prudential (L:PRU), were the biggest drags after Hong Kong's leader said violence in the city's anti-government protests was becoming more serious.
The protests, as well as the threat of a potentially chaotic no-deal Brexit faced by more domestically-exposed banks including Lloyds (L:LLOY) and Barclays (L:BARC), have pushed the sub-index (FTNMX8350) down nearly 9% this year - significantly underperforming a 5% rise in the FTSE 100.
Despite U.S. President Donald Trump's prediction of a trade deal with China after positive gestures by Beijing, traders are still waiting for more details after tit-for-tat tariffs that went north of $500 billion weighed down financial markets last week.
While Trump repeated his assertion that Chinese officials had contacted U.S. trade counterparts offering to resume negotiations, China has declined to confirm that.
"The number of twists and turns in the trade dispute, particularly more recently have made the markets incredibly challenging to trade," London Capital Group analyst Jasper Lawler said.
Among midcaps, IWG (L:IWG) climbed 2.3% to be among the top gainers after Sky News reported over the weekend that the company was planning to list its U.S. arm in New York for three billion pounds.
Carpetright (L:CPRC) surged 14.4% as its biggest shareholder, Meditor Capital Management, is set to buy the retailer's 40.7 million pound line of credit from its lenders. Peel Hunt analysts said the news took away any uncertainty pertaining to the company's refinancing.