(Reuters) - London's FTSE 100 fell further on Thursday as a standoff between U.S. and China over Hong Kong put off hopes of an imminent trade deal, while mid-cap Royal Mail slumped 12% after saying it was behind schedule on its turnaround plan.
The main index <.FTSE> shed 0.7% as financial stocks and oil firms dropped amid a fresh row between the two countries after U.S. legislation on Hong Kong drew condemnation from Beijing, casting doubt on progress over the trade deal.
Shares in BAT <BATS.L> outperformed, however, ahead of a meeting on vaping guidelines at the White House on Friday.
The mid-cap FTSE 250 <.FTMC> slid 0.8%, as Royal Mail's <RMG.L> plunge more than offset a 6% rise in Direct Line <DLGD.L> after Britain's biggest motor insurer laid out a plan to cut expenses.
(Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Shailesh Kuber)
