UK shares inched lower on Monday as renewed Middle East hostilities weighed on risk sentiment, while investors also awaited a highly anticipated speech from Andy Burnham, who is widely expected to be Britain's next prime minister.
The blue-chip FTSE 100 index CURRENCYCOM:UK100 fell 0.2% by 0949 GMT, while the midcap FTSE 250 FTSE:MCX slipped 0.1%.
Consumer staple shares (.FTUB4510) weighed on the FTSE 100 after British American Tobacco LSE:BATS dropped 1.6% on the tobacco giant's plans to reduce its workforce by 20%.
Aerospace & defence stocks (.FTNMX502010) came under pressure with BAE Systems LSE:BA. and Babcock LSE:BAB falling 1.4% and 7%, respectively. The Ministry of Defence said on Sunday that the UK will scrap plans to replace its ageing destroyers to focus on drone warships.
Mining shares were lower due to a decline in gold TVC:GOLD after the recent escalation in the Mideast fueled inflation concerns.
Keeping losses in check were energy FTSE:NMX601010 and financial (.FTNMX301010) shares.
BT LSE:BT.A and Verizon NYSE:VZ announced a deal to combine their international enterprise operations into a 50:50 joint venture. Shares of the British telecoms group were marginally up.
In politics, investors awaited Labour lawmaker Burnham's speech for clues on his fiscal policy plan and thinking on the economy.
On the economic front, a survey showed British companies' expectations for growth in the coming quarter fell this month to their lowest level this year.
Both the internationally focussed FTSE 100 and the domestically exposed FTSE 250 ended last week lower.