European equities kicked off the week strongly on Monday, but gave up stronger gains, after major indices in New York opened in the red.
Elsewhere, eyes were on talks between the leaders of the US and China.
Presidents Joe Biden and Xi Jinping tried to take some heat out of their simmering superpower rivalry Monday, during a three-hour summit that found common ground on Ukraine but left little doubt that stark differences remain.
Biden emerged from the meeting proclaiming that there need not be a new Cold War, as both leaders spoke of the desire to prevent high tensions from spilling over into conflict.
Xi told Biden that the two countries 'share more, not less, common interests', according to a Chinese account of the meeting, sounding more conciliatory than the last three pandemic-filled years without face-to-face presidential meetings would suggest.
The FTSE 100 index closed up 67.13 points, 0.9, at 7,385.17. The blue-chip index had been 1.3% higher earlier in the afternoon, but sentiment weakened slightly after a less-than-stellar start to the week for stocks in New York.
The FTSE 250 edged up just 6.04 points to 19,622.25. The AIM All-Share closed down 3.29 points, 0.4%, at 851.55.
The Cboe UK 100 ended up 0.9% at 739.02, the Cboe UK 250 closed down 0.1% at 16,921.03, and the Cboe Small Companies ended up 0.4% at 12,806.22.
In European equities on Monday, the CAC 40 in Paris ended up 0.2%, while the DAX 40 in Frankfurt ended up 0.6%.
Stocks in New York were weaker at the time of the London equities close. The Dow Jones Industrial Average was down 0.1%, the S&P 500 was 0.3% lower and the Nasdaq Composite fell 0.9%.
The dollar was largely on the up, amid hawkish noise from the Federal Reserve.
Christopher Waller, a member of Federal Reserve Board of Governors, warned at a conference in Sydney that the endpoint to interest rate increases was likely 'ways to go', downplaying cooler US consumer inflation data last week.
Reuters reported Waller said that while interest rates will rise in less sizeable increments, the Fed is not 'softening' its inflation fight.
Markets should look at the 'endpoint' of increases, not the pace of rate hikes.
The pound was quoted at $1.1714 late Monday afternoon in London, down from $1.1781 late Friday. The euro traded at $1.0334, up from $1.0326 on Friday. Against the yen, the dollar was quoted at JP¥140.45, up from JP¥139.07 on Friday.
Sterling will be in focus this week due to the upcoming autumn budget. Fiscal policymakers will hope Thursday's announcement does not spook investors like September's mini-budget did.
UK Prime Minister Rishi Sunak has insisted that the budget's difficult decisions will have 'fairness and compassion at their heart' after the chancellor warned everyone will be paying more tax.
The PM and Jeremy Hunt are considering allowing local authorities to impose larger rises in council tax next year to raise money for social care, among their tax-hiking measures.
Hunt is expected to make the support plan for energy bills less generous from April, instead switching to more targeted measures in order to save the Treasury billions, PA reported.
He is considering increasing the windfall tax on oil and gas giants from 25% to 35% while also expanding the levy to electricity generators.
Harbour Energy slid 9.4% in London on Monday, amid the windfall tax fears.
On the up, however, Informa surged 5.9%.
The London-based business publisher and events organiser upgraded its full-year outlook on the back of strong underlying revenue growth in the first 10 months of the year.
In the 10-months to October, it reported underlying revenue growth of 41% in its continuing business against the previous year. For 2021, Informa had posted an underlying revenue of £1.80 billion.
'Growth has been consistent across all specialist markets and all geographic regions where Covid restrictions have been removed and are fully open. In the US, customer demand has been particularly strong as business to business activity has returned at pace,' Informa said.
Elsewhere in London, ME Group added 10% after it upgraded its full-year outlook thanks to a first-half performance which came in ahead of expectations.
The instant-service equipment firm noted a strong recovery across continental Europe and robust consumer demand for all its services, leading it to up its guidance for the year.
Revenue is now expected to be between £256 million and £262 million for the full-year ended October 31, up from £257 million previously. Earnings before interest, taxation, depreciation, and amortisation is now expected between £82 million and £85 million, up from between £79 million and £84 million previously.
On AIM, biopharmaceutical firm Hutchmed jumped 16% on positive trial results.
It said its gastric cancer treatment fruquintinib, when combined with chemotherapy paclitaxel, met one of its primary endpoints of statistically significant improvement in progression-free survival during a phase-three study in 703 patients.
Progression-free survival is the length of time following treatment that a patient lives with the disease but does not see their condition worsen.
Gold was priced at $1,758.52 an ounce late Monday, down from $1,763.60 late Friday. Brent oil fetched $94.44 a barrel, down from $96.32.
Tuesday's economic calendar has monetary policy minutes from the Reserve Bank of Australia posted overnight. There is also retail sales data from China before European markets open. There is unemployment data from the UK at 0700 GMT and the eurozone at 1000 GMT, before a US PPI reading at 1330 GMT.
The local corporate calendar has trading statements from defence firm BAE Systems and industrial turnaround specialist Melrose. Telecommunications company Vodafone posts half-year results, while Imperial Brands reports annual results.
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