Britain's FTSE falls as investor confidence drains ahead of high-stakes G20

LONDON: UK shares closed lower on Friday notching up a second straight monthly loss, as weak China data drained confidence ahead of a high-stakes G20 meeting between China and the United States, with builders, financial and mining stocks leading the losses.

The FTSE 100 was down 0.8 percent, underperforming its euro-zone peers due in part to its heavy weighting in mining stocks. The midcap FTSE 250 was down 0.7 percent.

Stocks ended the day on their lowest levels of the session and the index lost 2 percent on the month amid lingering woes about Brexit, the trade spat and the slowing global economy.

Mining stocks were down 1.8 percent after China reported its weakest factory growth in more than two years and as investors fretted about the outcome of a meeting between U.S. President Donald Trump and China's Xi Jinping that may decide the fate of the prolonged trade dispute on Saturday.

Ken Odeluga, market analyst at City Index, cautioned that market uncertainty is likely to remain next week, with any relief rally following the meeting likely to be fleeting.

"The best possible outcome is that the U.S. and China can agree a 'ceasefire' and arrange more talks before Washington goes ahead with another set of tariffs pencilled in for January," Odeluga said.

With just one month to go, the mining sector is set for its first annual drop since 2015 amid lingering worries that Washington's trade row with Beijing could choke industrial metals demand from China, the world's top commodities market, and hurt the global economy.

Among other companies exposed to the economic climate in the world's second largest economy, Burberry dropped 2.8 percent along with other European luxury goods makers. China's burgeoning middle class is an increasingly important market for high-end retailers.

Kier Group lost about a third of its market cap after announcing it will sell shares to raise about 264 million pounds ($336.97 million).

The mid-cap-listed company's warning that lenders were looking to cut their exposure to the troubled UK construction sector also cast fresh gloom across the sector, which has been hit hard by worries over Brexit and the British economy.

Elsewhere, investors continued to punish travel companies after Thomas Cook's latest profit warning this week as the travel agent struggles with stiff competition from online rivals and low-cost airlines. TUI was down 6.6 percent.

Late on Thursday, S&P Global revised its credit outlook for Thomas Cook to negative. Shares fell another 10.6 percent at their lowest levels in six years. On Friday, Berenberg downgraded the stock to sell, describing the stock as "uninvestable".