Hold the fizz: Markets fall as US-China trade talks stall

The market failed to keep up the optimism it had shown late last week as China signalled it might take longer than hoped to wrap up the first part of a trade deal with the US.

State-owned newspaper China Daily wrote on Sunday those hoping for a trade deal should not count their chickens before they hatch.

“While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” the paper wrote.

David Madden, an analyst at CMC Markets, said that traders had been caught off guard by the signalling from China.

“The update from Beijing has resurfaced some trade concerns, so dealers are trimming their positions in equities,” he said.

The FTSE 100 closed down 33.63 points to end the day on 7,213.45. Meanwhile the FTSE 250 dropped 111.81 points to 19,929.90.

Sterling, meanwhile, was down 0.25% against the dollar to 1.2588. The currency settled after a massive 4% rise late last week on news that Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar had found common ground on Brexit.

But the news was not as positive over the weekend, said Connor Campbell, an analyst at Spreadex.

“Given the lack of progress over the weekend – the bloc said Boris Johnson needs to move ‘further and faster’ if he is to secure a deal in time – and the sheer exuberance seen across Thursday and Friday, it wouldn’t have been a surprise to see sterling suffer a severe comedown,” he said.

Germany’s Dax was down 0.2% on the day, while the French Cac index fell 0.4%. The Dow Jones opened flat.

In company news, Shares in cyber security group Sophos jumped 36% as investors reacted to a 3.82 billion dollar (£3 billion) takeover bid by a US private equity group.

The approach by Thoma Bravo has been accepted by the board and the deal will now go to shareholders for final approval.

Superdry’s founder has been appointed chief executive on a permanent basis as his control is extended for a further 18 months.

Julian Dunkerton, who wrested back control of the boardroom after heavily criticising the previous management, will now have the extra time to push through his “design-led” overhaul.

The European Union has approved the German government’s decision to grant airline Condor, a subsidiary of collapsed tour operator Thomas Cook, a 380 million-euro (£334 million) bridging loan to keep it in the air.

Germany’s economy ministry said the EU’s executive Commission gave its blessing on Monday.

The price of international oil standard Brent crude dipped 2.8% to 58.87 dollars per barrel, hit by the uncertainty over the US-China trade war.

The biggest risers on the FTSE 100 were WPP, up 25.6p to 956.6p, Next, up 126p to 6,584p, Kingfisher, up 3.9p to 214.1p, Aveva, up 54p to 3,772p, and Rolls Royce, up 9.2p to 752.4p.

The biggest fallers on the index were Evraz, down 16.8p to 417.7p, NMC Health, down 103p to 2,605p, Hargreaves Lansdown, down 62.5p to 1,790p, Auto Trader, down 17p to 522.6p, and Glencore, down 6.65p tp 230.85p.