UKX FTSE 100 Index

By Sara Sjolin and Victor Reklaitis, MarketWatch

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

U.K. stocks closed with losses for a second session Monday, driven lower in large part by resource stocks and banks, on the back of falling commodity prices and fears the so-called Trump trade is fading.

The FTSE 100 index dropped 0.6% to end at 7,293.50, notching 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 struggles with pushing through a health-care bill. The S&P 500 index ended on Friday with its biggest weekly loss since the U.S. election in November, and U.S. stocks fell further on Monday (http://www.marketwatch.com/story/dow-futures-slide-more-than-150-points-as-doubts-over-trumps-agenda-build-2017-03-27), weighed by Republican-controlled Washington's failure to repeal and replace Obamacare.

"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 lawmaking entity," he added.

Read:These 5 charts show how Trump's health-care flop is hitting markets (http://www.marketwatch.com/story/these-5-charts-show-how-trumps-health-care-flop-is-hitting-markets-2017-03-27)

And see:'Trump disappointment trade is now in full swing' -- analysts on global stock selloff (http://www.marketwatch.com/story/trump-disappointment-trade-is-now-in-full-swing-analysts-on-global-stock-selloff-2017-03-27)

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 1.6%, while Barclays dropped 1.2%. HSBC Holdings PLC (HSBA.LN) (HSBA.LN) (HSBA.LN) finished 0.3% lower.

A number of energy and mining stocks also declined, tracking oil and copper prices lower. Crude was trading 0.6% lower as concerns over rising U.S. rig counts outweighed chatter that the Organization of the Petroleum Exporting Countries may extend its production cuts.

Major oil company BP PLC's shares (BP.LN) (BP.LN) finished 0.9% lower, while Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) closed down by 0.3%.

Among miners, Glencore PLC (GLEN.LN) lost 4.4%, while BHP Billiton PLC (BLT.LN) (BHP.AU) dropped 3.9%.

BT Group PLC (BT.A.LN) gave up 0.2% 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.

Outside the main index in London, shares of Hurricane Energy PLC (HUR.LN) rallied 8.8% after the oil exploration company said it has made the "largest undeveloped discovery" of oil in U.K. waters.

(END) Dow Jones Newswires

March 27, 2017 12:02 ET (16:02 GMT)

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