UKX FTSE 100 Index

By Sara Sjolin, MarketWatch

Analyst: Setback for health bill in U.S. 'doesn't mean anything good'

U.K. stocks fell for a second straight session on Monday, driven lower by resource stocks and banks on the back of falling commodity prices and fears the so-called Trump trade is dwindling.

The FTSE 100 index dropped 0.8% to 7,280.75, setting it on track for its lowest close since Feb. 28, according to FactSet data.

The decline continues on a theme from last week, when the London index posted its biggest weekly loss since January amid concerns over U.S. President Donald Trump's failure to push through a health-care bill. The S&P 500 index ended with its biggest weekly loss since the U.S. election in November, and U.S. stock futures continued sharply lower on Monday (http://www.marketwatch.com/story/dow-futures-slide-more-than-150-points-as-doubts-over-trumps-agenda-build-2017-03-27).

"Given that the global indices had been inflated by the president's various promises, it is no surprise that the reaction to his 'Trumpcare' failure has been so vitriolic. Investors likely don't care one bit about the state of America's health care; they do care, however, about what this defeat means for his ability to push through the more market-relevant vows, namely tax reform and infrastructure spending," said Connor Campbell, financial analyst at Spreadex, in a note.

"It certainly doesn't mean anything good, with Trump seemingly unable to unite the Republican Party as a law-making entity," he added.

Banks in particular had been invigorated by the Trump-inspired "reflation trade," in which investors have bet on higher inflation, rising interest rates and stronger economic growth. As the Trump rally has faded, financials have been among the biggest decliners. In Monday's trade, shares of Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) fell 2.4%, Barclays fell 2.4% and HSBC Holdings PLC (HSBA.LN) (HSBA.LN) (HSBA.LN) gave up 0.9%.

Energy and mining companies were also declining, tracking oil and copper prices lower. Crude dropped 0.8% as concerns over rising U.S. rig counts outweighed chatter that the Organization of the Petroleum Exporting Countries may extend its production cuts.

Oil majors BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) fell 1% and 1.1%, respectively.

Among miners, Glencore PLC (GLEN.LN) lost 3%, while BHP Billiton PLC (BLT.LN) (BHP.AU) dropped 2.1%.

BT Group PLC (BT.A.LN) gave up 1.3% after the telecom giant was fined GBP42 million (http://www.marketwatch.com/story/bt-fined-42-million-pounds-over-openreach-failings-2017-03-27) ($52.5 million) over contract and regulatory breaches by its infrastructure business Openreach.

(END) Dow Jones Newswires

March 27, 2017 04:12 ET (08:12 GMT)

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