Britain's FTSE 100 retreated on Thursday as U.S. curbs on Chinese telecoms company Huawei further strained relations between Beijing and Washington. Small-cap Thomas Cook slumped to its lowest in more than six years after another profit warning.
The main index slipped 0.1% by 0806 GMT. Strong earnings reports helped the mid-caps gain 0.1%. Asia-focused HSBC and Prudential reeled after U.S. President Donald Trump heightened tensions with China by signing an executive order that effectively blacklisted the Huawei.
"This executive order appears to have curbed some of the exuberance of the late rebound in stocks yesterday ... " said CMC Markets analyst Michael Hewson. Luxury brand Burberry, whose shares have suffered from the Sino-U.S. trade conflict, gave up 4.7% and was on track for its worst day since January after reporting a drop in adjusted operating profit.
Brexit uncertainty also persisted. Members of Prime Minister Theresa May's Conservative Party said they would vote against her proposed Brexit agreement, which has already been rejected three times. "In case investors were in need of it, Thomas Cook provided a handy reminder of how much the ongoing Brexit uncertainty is costing," Spreadex analyst Connor Campbell said.
Thomas Cook slumped more than 17%, to levels not seen since November 2012, after the travel group said economic and political uncertainty would affect profits this summer. Its larger rival TUI fell 2.1%. Airlines easyJet and IAG gave up more than 1%. Mid-cap cybersecurity firm Sophos surged 13%, on track for its best day in more than a year, after reporting higher-than-expected annual earnings.
But specialist pension provider Just Group fell over 7% after first-quarter sales more than halved and it said it would shut its loss-making U.S. operations. AIM-listed Yu Group gained over two-thirds in value after the UK's financial regulators discontinued an investigation of its old financial statements.
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