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British Equities Fall; AstraZeneca Slides on Reported Bristol Myers Squibb Merger Talks

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London's FTSE 100 closed 0.16% lower on Monday as declines in oil prices weighed on energy stocks, while heavyweight AstraZeneca (AZN.L) slumped after reports of potential merger talks with US peer Bristol Myers Squibb.

Brent crude fell after President Donald Trump called off a planned strike on Iran following intervention from Gulf allies, easing fears of a wider conflict. Washington is also expected to resume negotiations with Tehran later Monday.

On the economic front, the UK's manufacturing sector remained in growth territory in July for the ninth consecutive month on the back of upturns in production, new business and new export orders, S&P Global said. Still, the final S&P Global UK Manufacturing PMI stood at a four-month low of 51.9, down from the prior 52.5 and the flash estimate of 52.8, as stocks of purchases declined and jobs growth slowed.

"[The] positive price and demand trends were not fully reflected in the labour market, with the upturn in manufacturing hirings grinding to a near halt in July, but the first rise in backlogs of work in over four years suggests employment could pick up in the coming months. This would be assisted if business optimism recovers from its current subdued level. Hopefully progress relating to geopolitics, global trade tensions and the direction of the new UK government's industrial and tax policies will aid, and not hinder, this process," S&P Global Market Intelligence director Rob Dobson said.

Investors will next turn to UK new car registration data and the final composite PMI on Wednesday, followed by construction PMI on Thursday and the Lloyds house price index on Friday.

In corporate news, AstraZeneca was the worst performer on the blue-chip index, losing 9.33% at close, after London's Financial Times cited sources as saying that the drugmaker is in talks with Bristol Myers Squibb over a potential $400 billion merger.

BP (BP.L) declined 0.34% after completing the sale of its refinery and related businesses in Gelsenkirchen, Germany, to independent refiner Klesch Group. The oil major said the disposal is expected to reduce its underlying operating expenditure by about $1 billion, in line with its capital allocation strategy.

Among the gainers, wealth manager St. James's Place (STJ.L) rose 2.85% after launching a share buyback program worth 128.1 million pounds sterling.

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