By Shashwat Awasthi
(Reuters) - London's FTSE 100 edged lower on Thursday, as a 6% drop in private equity company 3i and a handful of stocks trading ex-dividend overshadowed an earnings-driven surge in luxury brand Burberry .
The main index shed 0.1% with 3i Group (L:III) hitting a five-month low after its first-half report and heavyweight components Sainsbury (L:SBRY), Shell (L:RDSa) (L:RDSb) and GSK (L:GSK) weighing as they traded without dividend entitlement.
Luxury brand Burberry (L:BRBY), however, surged 7% as the popularity of designer Riccardo Tisci's collections boosted quarterly sales and offset declines in Hong Kong where trading was hit by ongoing protests.
The mid-cap FTSE 250 (FTMC) was flat, though transport operator FirstGroup (L:FGP) slid 14.5%, on track for its worst day since May 2018 after a bigger first-half loss due to a charge related to its Greyhound bus line business.
British markets avoided sharp declines despite a host of trigger points, including weak Chinese factory output data, anxiety around U.S.-China trade and political uncertainty in the U.S. amid an impeachment inquiry against President Donald Trump.
Slowing Chinese factory output growth was yet another sign of how Beijing's trade dispute with Washington was weighing on demand. To that end, China said the countries were holding in-depth discussions on a "phase one" trade agreement.
"If a deal doesn't go through in the next couple of weeks, the optimism seen in financial markets will rapidly turn into pessimism and I wouldn't be surprised to see a 5-10% correction in equity markets," said Hussein Sayed, Chief Market Strategist at FXTM.
"At this stage, markets are in a wait-and-see mode until further developments emerge."
Mid-cap Tullow Oil (L:TLW), which tanked nearly 30% in the previous session after cutting its production forecast, skidded another 4.5% as multiple brokerages downgraded the stock.
Jefferies analysts said poor quality of crude that Tullow discovered in Guyana was "an epic setback".
Airport operator Stobart (L:STOB) tumbled as much as 9% on the small-cap index after suspending its dividend and posting a bigger first-half loss.