LONDON (dpa-AFX) - U.K. stocks recovered after a weak start on Monday, with investors looking for some bargain hunting after recent losses on trade concerns.
However, the mood remains cautious with investors tracking news on trade relations and digesting data showing an unexpected contraction in UK manufacturing sector.
The benchmark FTSE 100, which dropped to a low of 7,079.71, rallied to 7,161.71, but retreated subsequently into the red. At 7,141.43, the index is down 20.28 points, or 0.27%.
On Friday, the index lost about 0.8%.
Dixons Carphone, Capita, Hargreaves Lansdown, ITV, Standard Life, St James Place, Intu Properties, Standard Chartered and Royal Mail are down 2 to 4%.
Fresnillo is gaining more than 3%. BAE Systems and SSE are gaining 2.3% and 2.2%, respectively.
Burberry Group, National Grid, Anglo American, Astrazeneca, United Utilities, GlaxoSmithKline and Diageo are up 0.5 to 1%.
In economic news, survey results from IHS Markit showed the UK manufacturing sector contracted unexpectedly in May, for the first time since July 2016.
The headline IHS Markit/ Chartered Institute of Procurement & Supply Purchasing Managers' Index declined more-than-expected to 49.4 in May from 53.1 in April. The score was forecast to fall moderately to 52.0.
The total volume of new business placed fell for the first time in seven months. Export orders declined at the fastest pace in over four-and-a-half years, reflecting Brexit uncertainty.
The renewed downturn in new orders weighed on both output and employment. Output charges inflation rose to a three-month high in May, largely due to a marked acceleration for consumer goods.
Further, the survey showed that almost 49% expect output to be higher in 12 months' time, compared to 7% forecasting contraction.
'With one of the fastest shrinking rates seen in six and a half years and the biggest drop since July 2016, straight after the referendum result, based on this result, there is the likelihood of more bad news to come,' Duncan Brock, group director at the CIPS, said.
In Brexit-related news, U.S. President Donald Trump on Sunday encouraged the United Kingdom to 'walk away' from any negotiations with the European Union in the event of the country failing to secure a favorable Brexit deal.
'If you don't get the deal you want, if you don't get a fair deal, then you walk away,' Trump is quoted as saying in an interview by The Sunday Times.
Trump also said that his administration would 'work on it very, very quickly.'
'I'd go all out,' Trump told The Times. 'It would be a great advantage for UK. One of the advantages of Brexit is the fact that you can deal with the number one country by far, we're the number one by far in terms of every metric in terms of an economy.'
Trump arrived in London today on a 3-day visit.
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