LONDON (Reuters) - UK shares were lower on Friday, heading towards their second straight monthly loss, as weaker-than-expected China data drained confidence ahead of a G20 summit this weekend, hitting financial and mining stocks hardest.
The FTSE 100 <.FTSE> was down 0.8 percent at 0943 GMT and underperforming its euro-zone peers due to its heavy weighting in mining stocks. The midcap FTSE 250 <.FTSE> was down 0.6 percent.
Pharma and biotech were the only sectors in positive territory as investors flocked to high-dividend defensive stocks that are favoured during times of economic and geopolitical uncertainty.
In contrast, mining stocks were down 1.6 percent after China reported its weakest factory growth in more than two years and as investors fretted about the outcome of a key meeting between U.S. President Trump and China's Xi Jinping over trade on Saturday.
It's the first meeting between the two leaders in months while Trump has threatened to increase import tariffs on goods from the United States' top trading partner in the new year.
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
China's burgeoning middle-class with greater spending clout are an increasingly important market for high-end retailers.
Elsewhere, Sage was the biggest decliner after Goldman Sachs downgraded the British software group to neutral, noting the time it will take for the company to shift to subscription services.
Among the midcaps, financial stocks were the biggest falls, with CYBG CYBGC.L> down 3.9 percent and Quilter down 3.7 percent.
Investors continued to punish Thomas Cook after its latest profit warning this week as the travel agent struggles with stiff competition from online rivals and low-cost airlines.
Late on Thursday, S&P Global revised its credit outlook for the company to negative. Shares fell another 4.3 percent to the bottom of the FTSE 250 stack and their lowest levels in six years. On Friday, Berenberg Bank downgraded the stock to sell, describing the stock as "uninvestable".
On the blue-chip index, rival TUI was down 0.7 percent.
(Reporting by Josephine Mason; Editing by Richard Balmforth)