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FTSE 100 down 0.4%, FTSE 250 down 0.8%

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Ocean Wilson down after agreeing to merge with Hansa

Investment

(Updates with closing market prices)

July 28 (Reuters) - London's main stock indexes closed

lower on Monday, pressured by industrial shares, while investors

assessed a U.S.-EU trade deal along with economic data.

The blue-chip FTSE 100 reversed earlier gains with a

0.4% fall, while the domestically focused midcap FTSE 250 index

fell 0.8%.

The U.S. struck a framework trade agreement with the EU on

Sunday, which imposes a 15% tariff on most EU goods and requires

the bloc to invest around $600 billion in the United States.

However, some European capitals complained it was lopsided

in favour of Washington.

Meanwhile, data showed on Monday a downturn in British

retail sales extended into its tenth month in July as rising

prices weighed on consumers, although the pace of the fall was

less severe than in June.

Also on Monday, the U.S. and China met in Stockholm to

resume talks to resolve longstanding economic disputes at the

centre of a trade war between the world's top two economies,

aiming to extend a truce by three months.

In the market, the industrial subindex led

the broader sectoral decline, down 1.6%, with RS Group

falling 3.1%.

Precious and industrial metal

miners fell nearly 1% and 0.9% respectively, tracking lower gold

and metal prices.

Conversely, energy stocks rose 1.2% as oil

prices rose.

Heavyweight BP gained the most in the FTSE 100, up

2.2%.

Among individual stocks, Ocean Wilsons Holdings

slipped more than 14% after the British investment holding

company agreed to an all-share merger with Hansa Investment

, creating a £900 million ($1.21 billion) diversified

investment firm.

The Bank of England is expected to slow the pace soon at

which it shrinks its 558 billion-pound ($754 billion) holdings

of government bonds, with economists hoping for some clarity

next week on the central bank's longer-term goals for the

stockpile.

Traders are currently pricing in an 86.5% chance of a 25

basis point BoE interest rate cut on August 7, according to data

compiled by LSEG.