UPDATE 1-FTSE pauses after 3-day rally as investors await trade moves

London's FTSE 100 retreated on Wednesday after rallying nearly 2% over the past three sessions as investors waited for new developments on U.S.-China trade talks before making further bets, while mall operator Intu dropped on prospects of a cash call.

The FTSE 100, which had been holding at a near one-month high this week, inched down 0.1% by 0836 GMT. The FTSE 250 was largely unchanged, but Marks & Spencer stood out with a 5% jump as investors focussed on the retailer's like-for-like sales growth in food business over a plunge in first-half earnings.

Intu Properties slid 15.4% after saying it may need to raise additional cash and that letting activity slowed in the third quarter as some customers delayed decisions due to Brexit-driven uncertainty. It also forecasts a drop in annual rental income. The update knocked 1.3%-2.4% off shares in rivals Land Securities, British Land, and Hammerson.

Broader global markets also held back due to the lack of major updates on the U.S.-China trade deal after recent optimism that the world's two largest economies could sort out their trade dispute as soon as this month. The FTSE 100, whose constituents book more than two-thirds of their earnings abroad, had in August suffered its steepest monthly fall this year when trade tensions peaked.

"A vast amount of optimism built into financial markets over the past two weeks," OANDA analyst Jeffrey Halley said. "There are plenty of banana skins that could slip up the story." Mothercare shares shot up by 40% and were on course for their best day in nearly two decades. The baby products retailer shut all its UK stores and laid out plans to return the rest of the company to profitability by fiscal 2021.

"There were worries that they (Mothercare) are going to go bust, they are obviously not bust," a trader said. If gains hold, Mothercare will claw back all the losses that followed its notice of intent to appoint administrators for its UK operations on Monday.

Also Read: UPDATE 1-FTSE 100 on track for fourth session of gains

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