FTSE 100 closed in the red as the pound strengthened sending big cap shares lower but resource stocks gave support.
The UK blue-chip index closed over 33 points lower, or 0.48% at 6,888.
The FTSE 250 was also down - over 132 points at 19,187.
Meanwhile, in the currency markets, sterling added 0.01% against the Euro to 1.1434, while against the US dollar, it added 0.60% to 1.4232.
Silver giant Fresnillo (LON:FRES) remained the biggest gainer on Footsie, after Goldman Sachs upgraded its rating to 'buy' from 'neutral'.
Goldman also upgraded its rating for peer Randgold Resources PLC (LON:RRS) to 'buy' from 'hold', which also made the cut of top five FTSE 100 gainers, up 1.08% to 5,996p.
Top loser on Footsie was Smurfitt Kappa Group (LON:SKG), which fell 4.12% to 2,932p as Memphis-based International Paper came again at the group with an improved offer valuing the business at ?,?8.9bn ( ?7.8bn) but was turned down again.
The Footsie held firm in late afternoon trading as Wall Street posted a strong restart, recouping all and more of Friday's sharp falls on reports US and Chinese officials are conducting behind-the-scenes talks to avert a global trade war.
At 2.45pm, the FTSE 100 index was about 24 points higher at 6,946, albeit easing further off the day's peak of 6,958.23.
In early trading in New York, the Dow Jones industrials was over 505 points higher at 24,039, having posted a 450-point slide on Friday which took it down to its lowest level of the year.
Traders took some cheer from news of talks led by US treasury secretary Steven Mnuchin and Liu He, China's vice premier for economic policy, aimed at providing better access to Chinese markets for US companies.
The Trump administration ratcheted up the tension last week by declaring tariffs on certain Chinese goods and China fired back with its own trade-related clampdown.
In a note to clients, Paul Donovan, global chief economist at UBS commented: "The trade war is increasingly looking like a phoney war. Even if US trade policy is more spin than sUBStance, increasing uncertainty does have implications for markets."
The FTSE 100 held near session highs in early afternoon trading, supported by expectations for a big bounce back today by US stocks after having logged their worst weekly performance in more than two years last week on trade war fears.
Around 1.15pm, the UK blue chip index was up about 29 points at 6,950, just below the session peak of 6,958.23.
US stock index futures pointed to around a 300-point rebound by the Dow Jones industrials, following Friday's 450-point slide, helped by reports that US and Chinese officials are conducting behind-the-scenes talks to avert a global trade war.
President Trump's tweets mentioning the stock market
HT: @ReutersJamie pic.twitter.com/fnxU2eXG0S
A handful of Federal Reserve speakers may also capture attention as well, as a holiday-shortened week of trading kicks off with the Easter break starting on Friday
Chris Beauchamp, chief market analyst at IG said:" With equity markets so heavily beaten down last week, a rebound was a definite possibility, the only questions are how long it lasts and how far it goes."
He added: "Churchill's observation that 'to jaw jaw is better than to war war' applies to these tariff battles as well. The decision to exempt key US allies from the tariffs is a sign that the White House is not as dogmatic as the rhetoric appears, and should give negotiators room for manoeuvre.
"Still, given how badly equities reacted last week a failure of negotiations would likely prompt another ugly sell-off."
In London, gold miners were in demand, led by Mexico-focused Fresnillo PLC (LON:FRES), which was the biggest FTSE 100 gainer up 5.4% to 1,273p after Goldman Sachs upgraded its rating to 'buy' from 'neutral' and added the stock to its 'Conviction List' in a bullish note on the gold sector.
Goldman also upgraded its rating for Fresnillo's blue chip African gold mining peer Randgold Resources PLC (LON:RRS) to 'buy' from 'hold', which added 1.6% at 6,028p.
Overall the US investment bank upped its EMEA Metals & Mining sector view to "attractive" from "neutral" as it turned bullish on gold for the first time in five years, citing higher inflation, rising wealth and concerns about an equity correction.
Broker comment also helped blue chip lender Royal Bank of Scotland Group PLC (LON:RBS).shares to gain 2.4% at 260.8p after Deutsche Bank upgraded its rating to 'buy' from 'hold', although it shaved 10p off the price target at 305p.
And shares in Smith & Nephew PLC (LON:SN. and ConvaTec Group PLC (LON:CETC) were given a leg-up on Monday after HSBC turned positive on the medical products companies.
HSBC upgraded both stocks to a 'buy' rating from 'hold' in a note on the European healthcare equipment and services industry.
FTSE 100-listed Smith & Nephew gained 0.9p at 1,311p, and FTSE 250-listed ConvaTec added 0.9% at 198.3p.
Mexico-focused precious metals miner Fresnillo PLC (LON:FRES) was the biggest FTSE 100 gainer in lunchtime trading, up 5.8% to 1,278.5p after Goldman Sachs upgraded its rating to 'buy' from 'neutral' and added the stock to its 'Conviction List' in a bullish note on the gold sector.
Overall the US investment bank upped its EMEA Metals & Mining sector view to "attractive" from "neutral" as it turned bullish on gold for the first time in five years, citing higher inflation, rising wealth and concerns about an equity correction.
Goldman also upgraded its rating for Fresnillo's blue chip African gold mining peer Randgold Resources PLC (LON:RRS) to 'buy' from 'hold' and reiterated "buy" ratings on Centamin PLC (LON:CEY) and Polymetal International PLC (LON:POLY).
The bank said that stocks with excessive cashflow, that can be returned to investors, could be relative outperformers.
Strength in the precious metal stocks helped the FTSE 100 rally today, with the index pushing up to session highs, ahead 33 points to 6,955.45, lifted too by expectations for a recovery on Wall Street after Friday's sharp falls on US/China trade war worries.
UK banks approved 11% fewer mortgages in February than a year earlier, according to industry data, a step back after rising for the first time in four months in January.
Industry association UK Finance said mortgage approvals fell to 38,120 last month, down from 40,031 in January, suggesting a downturn in Britain's housing market as uncertainties over the 2016 Brexit vote continue to bite.
#UKFinance reported #mortgage approvals for #UK #house purchases fell back to 38,120 in Feb, 2nd lowest level (after Dec) since Aug 2016. Even if some negative impact from the severe weather that first hit at end-Feb, this still points to a housing market struggling for momentum
- Howard Archer (@HowardArcherUK) 26 March 2018Meanwhile, consumer credit rose by 0.8% in annual terms in February, having risen by 0.6% in January, its weakest increase since UK Finance's new consumer credit series started in April 2017.
And net credit card lending amounted to ?309mln last month, down slightly from a net increase of ?325mln in January.
The news failed to impact a mixed pound, with the UK currency 0.6% higher versus the dollar at US$1.4222, but flat against the euro at ?,?1.1469 after gains last week on EU Brexit talks breakthrough.
In late morning trading, the FTSE 100 index was around 22 points higher at 6,943, staying below an earlier peak of 6,953.88.
Optimism levels in the banking sector have fallen to a low of -17% compared to the last three months, according to the latest PwC/CBI Financial Services Survey, although business volumes grew in the quarter.
The survey partly attributed the decline to a predicted spike in operating costs as a result of new regulation, with the report the first to track optimism levels since major changes including MIFID and PSD2 came into force.
Financial services firms saw growth in business volumes accelerate in the quarter to March, with a further, healthy increase expected. #CBIPwC https://t.co/JN5qY1QZVu pic.twitter.com/wsFdLhTGMz
- CBI Economics (@CBI_Economics) 26 March 2018Firms typically spend 4% of their total revenue on compliance, but that could rise to 10% by 2022, according to a survey by Duff and Phelps. In addition, 70% of firms expect the focus on managing regulatory risk to increase over the coming year.
Nick Hammond, Lead Adviser for Financial Services at World Wide Technology, comments: "To meet new assurance mandates, policy has to be abstracted from the current legacy security infrastructure model and instead wrapped around individual applications, such as the payments system or credit card database.
"However, over the years, IT architectures have become a patchwork of updates, and responsibility for making changes to different business applications is spread out amongst different teams.
"Trying to isolate one application to secure it can result in the direct breakdown of others. For example, e-commerce systems may rely on credit card databases in order to function, and would cease to work if the communication was cut off. Essentially, one step forward could actually be two steps back".
The FTSE 100 index remained higher in mid-morning trading, up around 17 points at 6,939 but eased back from an earlier peak of 6,953.88.
Meanwhile sterling also found gains, adding 0.5% versus the dollar at US$1.4203, and up 0.1% against the euro at ?,?1.1452.
The FTSE 100 index pushed higher as the morning session progressed, recovering after last week's Trump trade war related falls after the US Treasury Secretary offered an olive branch to China over possible sanctions.
Around 9.20am, the UK blue chip index was about 29 points higher at 6,950, having dropped 30 points on Friday at the end of a pretty dismal week.
Naeem Aslam, senior market commentator at thinkmarkets.com commented: "European markets and US futures are trading higher as traders are hopeful that the US Treasury Secretary, Steven Mnuchin, may help them to save the day.
"If the US can reach a deal with China, it will avert the need to impose sanctions of $50 billion of goods from China."
He added: "It is fair to say that the optimism that traders had about the Trump administration had diminished fairly rapidly and even his plans for infrastructure spending which was supposed to spur some risk on trade has mostly failed.
"The bounce which we are experiencing in the equity market could only be a dead cat bounce. It would only be a matter of time when we will see the negative impacts of these events trickling into the economic data and that would only create stronger compounding effect."
On the corporate front in London, GKN PLC (LON:GKN) edged 0.5% higher to 431.2p after the FTSE 100-listed engineer received a sweetened offer from Dana Inc (NYSE:DAN) for its automotive division just days before the acceptance deadline on a hostile takeover bid from Melrose Industries PLC (LON:MRO).
Dana has increased its bid for the GKN Driveline business by US$140mln in cash, taking the total amount shareholders would receive to US$1.77bn after deducting US$1bn for the transfer of GKN's pension deficit to the combined group.
Stratex International PLC (LON:STI) said it has received approval from the Senegalese government regarding the Dalafin gold project. The AIM-listed gold exploration group said the approval related to its Option Agreement with AGEM Senegal Exploration Suarl (AGEM), a sUBSidiary of IAMGOLD Corp (IAMGOLD).
Instem PLC (LON:INS), the technology provider to the drugs industry, has announced a significant contract extension from a company using its SEND platform. The client, described as a top-five pre-clinical contract research organisation, has increased the size of the deal by US$400,000 to US$500,000.
ANGLE PLC (LON:AGL) has presented US cancer experts with detailed data from the study last year that highlighted the ability of its circulating tumour cell diagnostic to identify ovarian cancer. Results from the pelvic mass study were presented to The Society of Gynecologic Oncology (SGO) Annual Meeting on Women's Cancer in New Orleans.
Vast Resources PLC (LON:VAST) has boosted the JORC resource at its Manaila polymetallic project in Romania by 78%. The resource now amounts to 4.6mln tonnes of ore grading 0.97% copper, 0.32% lead, 0.68% zinc, 25.8 grams per tonne silver, and 0.23% gold. Indicated resources increased by more than 200% to over 3.5mln tonnes of ore.
Mobile ad specialist Taptica International Ltd (LON:TAP) beat both revenue and profits expectation in the year just ended, driven by a recent expansion into the Asia-Pacific region. Sales jumped by 68% to US$211mln in 2017, while underlying profits [adjusted EBITDA] increased by a third to US$34.2mln, both slightly higher than broker estimates.
Akers Biosciences Inc (LON:AKR) (NASDAQ:AKER) has signed a three-year national distribution deal with Diagnostica Stago for the former's test for Heparin-induced thrombocytopenia, an adverse reaction to the blood thinner. Under the agreement, Stago will market and sell Akers' PIFA PLUSS PF4 rapid assay.
WideCells Group PLC (LON:WDC) has signed a deal to bring its stem cell insurance product, CellPlan, to the Asian market. The London main market-listed healthcare services group said the agreement had been signed with Cryoviva, a cord blood storage facility with operations in Thailand, Singapore and India.
Regenerative medtech company Tissue Regenix PLC (LON:TRX) said sales in both CellRight and BioSurgery have had a strong start to the year.
Amphion Innovations PLC (LON:AMP) has said the parent of its partner company, Polarean Inc, is seeking to list on AIM in an initial public offering (IPO). The med-tech investor, itself listed on AIM, said Polarean Imaging PLC is proposing to raise ?3mln from a conditional placing, and will have an expected market cap of at least ?11mln.
Cell-based therapeutics specialist ReNeuron Group PLC (LON:RENE) is to increase the number of clinical sites in its PISCES III study from 25 to 40. The board said trading in 2018 remains in line with its expectations.
Connemara Mining Company PLC (LON:CON) will continue to follow its investment in the 23.44%-owned Stonepark project currently being drilled by Group Eleven Resources. In addition, exploration activities are ongoing across two gold projects and multiple zinc projects, and the company is on the lookout for further opportunities.
Drilling on the T3 copper project held in joint venture between MOD Resources and Metal Tiger PLC (LON:MTR) has returned further favourable results. A new resource update is expected in early June, with the data likely to feed into an ongoing feasibility study. SDX Energy Inc (LON:SDX) (CVE:SDX) told investors that it has now spudded the Ibn Yunus-1X exploration well at South Disouq project, Egypt, following up last year's SD-1X discovery. The new well is expected to take 30 days to drill.
Columbus Energy Resources PLC (LON:CERP) has confirmed that it has now completed its planned redundancies in Spain, where it is winding up an oil production operation (before it tenders for a restart of the same field).
Alaska-focused explorer 88 Energy Limited (LON:88E, ASX:88E) told investors that it has completed the refinancing of a loan with Bank of America, on 'sUBStantively similar' terms to the original agreement - albeit, maturity moves out to 2022.
Erris Resources PLC (LON:ERIS) has started work on a 20-line km electro-magnetic ground geophysical survey at the K??ringberget gold project in northern Sweden. The survey is fully funded by Centerra, which is investing US$1.85mln across Erris' Swedish portfolio during 2018.
Frontier IP Group PLC (LON:FIPP), the AIM-listed firm which specialises in intellectual property commercialisation, has appointed a communications professional to the team and is opening a new base in London to provide a foundation for the next phase of the group's growth. It said Andrew Johnson, former deputy city editor of the Daily Express, will have responsibility for communications and investor relations across the group's activities.
Belvoir Lettings PLC (LON:BLV), the UK's largest property franchise, announced that, after over five years of service to its board, Nicholas Leeming is stepping down as a non-executive director of the company with effect from 10 April 2018 and Michael Stoop is joining the board as non-executive director with immediate effect.
Berkeley Energia Limited (LON:BKY) has announced the appointment of Berenberg and Tamesis Partners as joint brokers, with immediate effect.
Representatives from Silence Therapeutics PLC (LON:SLN) will be presenting at four scientific conferences over the next two months.
Savannah Resources PLC (LON:SAV)), the AIM-quoted resource development company, is pleased to announce that the Portugal Lithium Project Presentation is available for download on the company's website.
Touchstone Exploration Inc. (LON:TXP) (TSX:TXP), an oil and gas exploration and production company active in the Republic of Trinidad and Tobago, said it will be holding a live online investor presentation and Q&A session for investors tomorrow, Tuesday 27 March, to discuss its final results. The webcast will be recorded and made available on ValueTheMarkets.com after the event.
City traders ignored the jitters caused in Asia caused by a potential ratcheting up of trade tensions as the FTSE 100 opened the session 14 points to the good at 6,936.31.
That said, investors were still looking for safe havens for their unallocated cash and used precious metals miners Fresnillo (LON:FRES), up 3.5%, and Rangold (LON:RRS) instead of direct investment into gold and silver.
Up 1.6% early on was Royal Bank of Scotland (LON:RBS) after the London analysts of Deutsche Bank moved to 'buy' from 'hold' on stock in the group.
Shares in packaging giant Smurfit Kappa (LON:SKG) fell 2.6% after it rejected an ?7.8bn bid from International Paper.
Dropping down a division, JD Sports (LON:JD.) was heading the pack on the FTSE 250 with a gain of 3.5% after the market applauded its move into the US with the acquisition of the Finish Line for just under ?400mln.
The Footsie is seen rallying in early trade on Monday following last week's share falls in spite of further poor performance from Asian markets amid US/China trade war worries, but with slight gains by US stock futures and some corporate action provided underlying support in London.
Spread betting firm IG expects the FTSE 100 index to open around 15 points higher at 6,935, having dropped 30 points on Friday.
On Wall Street, the Dow Jones plunged 424 points lower on Friday and Asian shares got hammered today, with Japan's Nikkei 225 index down 0.4%, although that was above lows as US stock futures pointed to modest recovery today in New York.
On currency markets, the pound was 0.2% higher versus the dollar at US$1.4157 and up 0.1% against the euro at ?,?1.1450 following last week's Brexit deal breakthroughs.
On the corporate front, aside from the latest twist in the GKN (LON:GKN)/Melrose (LON:MRO) bid saga, sports and fashion retailer JD Sports Fashion (LON:JD.) said it has agreed to buy US firm The Finish Line Inc for US$558mln ( ?396mln).
Meanwhile, US auto components maker Dana Inc (NYSE:DAN) has increased its offer for GKN's Driveline business by US$140mln ( ?98.86mln ) in cash as it stepped up its efforts to fight off rival suitor Melrose.
Trading updates: Pennon PLC (LON:PNN)
Finals: Instem PLC (LON:INS), JKX Oil & Gas PLC (LON:JKX), SpaceandPeople PLC (LON:SAL), Satellite Solutions Worldwide Group PLC (LON:SAT), Tapitica International PLC (LON: (TAP), Tissue Regenix Group PLC (LON:TRX)
Interims: YouGov PLC (LON:YOU)
Economic data: BBA mortgage lending figures; US Chicago Fed Activity index, US Dallas Fed Manufacturing report